A pre- election promise is being fulfilled by the American president, who proceeds with a significant tax rise for the richest Americans and especially for those with annual income bigger than $400.000. This rise aims to help gather $1 trillion worth capital, which will fund almost 50% of the colossal reconstruction plan of America.

In recent days, it seems that there has been a lot of preparation for the markets as many colossal companies and prominent CEOs have expressed their support for this decision as they typically state that the US reconstruction plan will contribute a lot to the development of the future.

This decision to increase taxation will affect all its sectors, but as several investment firms typically report, the final reconstruction package in America will again be credited to the country's largest companies. Thus, it is expected that the "hit" in EPS will be temporary and that in the coming quarters the increase in profitability will be much stronger.

The historical background of the tax increase gives us several important data with which we could assess the future. Initially, the tax increase is quite likely to lead to some pressure on the markets with the technology industry but also with the over-performing stocks are likely to receive the biggest blow.

There is an important observation from the recent past and specifically from 2013, when Obama also increased taxes. The period 2011-2012 was preceded by a fairly intense rally in stocks, which was accompanied by record sales (given the circumstances of the time), by the so-called insiders. We observe a similar behavior today. In November 2020, shortly after the election, insiders recorded a record high in sales and on March 20, 2021, just one year after the crash, another record high in insider selling was recorded. After the one-year rally which led to 80% profits, sales by shareholders are perfectly reasonable, as well as it is reasonable to believe that from the resulting income will be paid their increased tax liabilities.

Of course we must not forget that the repurchases of own shares have been growing steadily in recent quarters and this is a mechanism that could absorb some of the pressure, if these are significant.

The even temporary increase in taxation seems to be a coordinated move that followed the pandemic and aims to stimulate state funds. That is, on the one hand, governments have provided record budget support and on the other, with deposits now higher, there is a targeted tax increase. For example, China, which has historically recorded high volumes of activity in the stock markets, imposed a tax increase that generated $ 13.6 billion in revenue in the first quarter of 2021 alone. This is the highest amount since 2015.