- Joe Biden’s plans to raise taxes on ultra-wealthy households and corporates will be a key focus for markets if he wins the November election, Eric Robertson of Standard Chartered Bank told CNBC.
- Robertson said markets will factor in whether Biden’s tax plans pressure domestic equities and credit markets at the expense of foreign markets.
- “Some of it will be very relevant to the dollar going forward,” Robertson said.
- Although many Americans can expect to see no major differences to their tax bill under Biden’s plan, hikes in corporate taxes could slightly decrease their take-home pay and investment returns.
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Joe Biden’s plan to raise taxes for rich Americans and corporates will be a key focus for markets if he wins the US elections, Eric Robertson, head of global macro strategy at Standard Chartered Bank told CNBC on Wednesday.
After the first of three presidential debates, where the Democratic candidate spoke of plans to repeal some of the tax cuts passed under incumbent Republican president Donald Trump, Robertson said Biden took a “centrist approach” on many issues.
He expects concern over whether Biden’s plans would put pressure on domestic equities and credit markets at the expense of foreign markets. “Some of it will be very relevant to the dollar going forward,” he said.
Robertson pointed out that no matter who wins the election, there will be an increase in government spending over the next couple of years to tackle the fallout from coronavirus.
But the Biden camp, in particular, seeks to mitigate the cost of that increased spending by reversing some tax cuts implemented under Trump’s administration.
That could lead to higher corporate taxes, higher taxes on high-earners, and a modified tax structure for capital gains, he said.
The Democrats will try to present the variety of modifications to the current tax law as a way to be “more redistributive” to help a broader section of the economy, and utilize it for some of their spending plans, Robertson said.
He said that Biden’s approach to tax policy during the debate was “not as extreme left as Trump would have liked in terms of having something to attack.”
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The following chart shows what effective tax rates for Americans, broken down by class, can be expected under Biden’s plan with his proposed corporate taxes factored in.
Although many Americans can expect to see no major differences to their tax bill under his plan, hikes in corporate taxes could slightly decrease their take-home pay and investment returns.
During the campaign trail, Trump has promised to once again cut taxes for all Americans but has yet to release a detailed plan on how that would work, according to Bloomberg.