As I am sure everyone is only all too aware, we are deep in an election season with less than a month to go until votes start being counted for president. As always, the economy ranks high when people are asked what they weigh when deciding their vote, so I thought it was worth spending some space here to go into what a vote for each side could mean in a financial sense.
One of the biggest accomplishments of President Trump’s time in office has been the Tax Cuts and Jobs Act that gave the country’s tax system a large overhaul. This largely shows Trump’s financial outlook and how he prefers to steer the economy. It may be impossible to say that Trump would be able to extend, or even continue, all the cuts in his original plan if reelected, as spending has already greatly increased due to the coronavirus pandemic, with both political parties talking about how further aid will still be needed.
From the other side, though, Joe Biden has already stated that he would plan to raise tax rates on the wealthy (those with an adjusted gross income of more than $400,000). He also has other differences in tax policy beyond the income tax, looking for increases in other areas, as well. If you want to get into deeper details on that, click through to this article from Accounting Today.
On the surface, when only one of two major candidates is running on increasing taxes, that would not seem to bide too well for Biden. The Democrats’ nominee, though, got a rather surprising nod from the financial sector last week, when Goldman Sachs released a note that said if Biden was elected in a ‘blue wave’ that also resulted in Democratic control on Congress, it would likely result in faster economic growth as the country recovers from the pandemic.
This forecast essentially comes down to how that blue wave outcome would allow the Democrats to push through a large fiscal stimulus package to help jumpstart the economy. For even as Republicans also currently work toward something in that area, the packages authored by Democrats promise to be larger. No matter the final numbers, though, getting anything passed would be a boon to the country over the current government impasse. And again, if anyone wants to get deeper into this projection, read this article from Business Insider.
Beyond that, even if you do not care to get any deeper into either of these issues, please read other articles about the issues you care about and read them from multiple sources. We all have instinctual feelings that we want to be true when it comes to politics and the future we hope it brings. There are enough people publishing information out there, that a Google search can uncover an article to back up any of those first-wave feelings. Do not stop there, though, and keep reading. Find pieces written from a nonbiased point of view and find pieces written from the opposite point of view. Only then can we be confident that we are voting in the way we should be, after having weighed various viewpoints and evidence.
Connect to Us ~ Facebook ~ Twitter
To ensure we don't make the folks at the IRS ornery, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.