With the U.S. Presidential Election just one month away, we are beginning to see more volatility in the markets as the voting result changes from time to time. As of 3 October, candidate Joe Biden is leading ahead of President Donald Trump. Here are two main policy differences between President Donald Trump and candidate Joe Biden.
Tax policy has always been one of the key focus when it comes to Presidential Election. The re-election of President Trump will lead to continued tax reduction. In particular, Trump is planning to extend individual income tax provisions included in the Tax Cuts and Jobs Act (2017) that is set to expire in 2025, making it more accommodative to high-earning personal. Also, corporate tax rate will stay reduced. The extension of the tax cuts (from 2025 to 2030) will cost the federal government $1.5 trillion.
On the other hand, candidate Joe Biden is strongly against tax cut. Biden’s plan is to enact policies that will increase taxes of high-income earners (above $400,000) through raising individual income, capital gains and payroll taxes. At the same time, corporations are not spared either. Biden is planning to increase corporate tax rate and also impose a corporate minimum tax to companies with more than $100 million in net income. Clearly, Biden’s tax plan is far from being appetizing to the rich. Nonetheless, his plan will increase the country’s tax revenue by $3.05 trillion over the next 10 years.
U.S.-China Trade War
When it comes to the U.S.-China trade war, both Trump and Biden share a common goal: To stay on top of China. However, we can see that both parties adopt a very different approach in accomplishing that goal.
If Trump were to be re-elected as president, he will beyond a shadow of a doubt resume his aggression on China. The first matter he will pursue is likely going to be on how China is progressing in terms of soybean and energy purchases from the U.S. It will not be surprising that Trump threatens to impose tariffs once again if China fall short of the agreed amount of imports during phase one of the trade discussion. Another matter that Trump will look into is the reduction of U.S. trade deficits with China. The solution? More tariffs. Biden on the other hand, takes a multilateral approach as opposed to Trump’s unilateralism. If elected as president, Biden promised to end the tariffs imposed on Chinese goods. Then, he will unite with other nations in a coordinated effort to pressure China to abide by the trade rules.
(This article was originally published on Samtrade Academy on 06 October 2020)
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