Senate bill to end ETF tax break is 'pretty unlikely to pass,' market analyst says

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Senate bill to end ETF tax break is 'pretty unlikely to pass,' market analyst says (via ETFEdgeCNBC)

"I think the chances are fairly low," Nadig said in a Monday interview. "It's easy to look at this and say, 'Well, gosh, this is a thing that rich guys are taking advantage of.' It's actually smaller investors that benefit the most from this."suggests stopping the tax break on in-kind transactions, which enable ETF managers to sell out of positions without triggering capital gains taxes for the end investors.

"It puts an ETF and a traditional mutual fund pretty much on the same footing, which means if somebody has to sell inside the portfolio, there's a taxable event," Nadig said. Though Wyden said the plan applies to "taxable accounts of the wealthiest investors," they have many ways to gain tax advantages outside of ETFs, which are "by no means" their primary way of doing so, Nadig said.

"This is pretty regressive and for that reason I think it's pretty unlikely to pass," he said. "But the reason? To try to raise revenue, obviously."

 

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