“BIDENOMICS!”

It now appears Joe Biden will be taking over the reins of power in January. I feel this is a good time to address some changes he might make based on his platform.  The question is, what does “BIDENOMICS” mean to your wallet or purse?

Over the years, I have found that politicians’ actions are often incongruent to their words.  Here are some of his proposed changes:

  1. People Making Under $400,000 Will Be Unaffected: His proposal is to leave those earners alone and add a “Social Security Increase Tax” of 6.2% on ALL income earned over $400,000.  Social Security is in jeopardy as baby boomers (10,000 people turn 65 every day) born from 1946-1964, are withdrawing Social Security benefits faster than working Americans are contributing; hence, the affluent would be bridging the Social Security gap. 
  2. Income Earners Over $1,000,000 Would Incur Higher Capital Gains Taxes: Americans with over $1 million in total income would see income brought in from dividends, as well as capital gains taxed like their wages.  In this scenario, if you had a stock or business sale, your capital gains tax doubles from 20% to roughly 40%.  This would change many business and investment decisions.  It would not be a bad idea to consider making those sales now as usually these changes are “Grandfathered.”
  3. Corporate Tax Rates Would Be Increased:  His proposal would increase corporate tax rates from 21% to 28%, a 33% increase.  This is a big change that would have corporations reevaluate moving or setting up subsidiaries overseas. 

In essence, his proposals would be taxing the rich and protecting the middle class.  Based on our current national and state budget deficits, I do see the middle class paying more taxes eventually; however, not in the beginning.

President-Elect Biden has vastly different viewpoints on many issues than President Trump, especially on energy, climate change, health care and infrastructure.  The “Green New Deal” was a centerpiece in Biden’s campaign.

Some areas where President-Elect Biden said he would concentrate on include:

  • Traditional Infrastructure
  • Digital Infrastructure
  • Electric Cars
  • Cannabis
  • Telemedicine
  • Green and Clean Energy

There has been much unhappiness and angst over the fact that Congress has not yet passed an additional stimulus package since the one that ended on July 31.   Many believe that there is a possibility that another stimulus package may be passed either just before, or shortly after the inauguration on January 20, 2021.

Keep in mind that it appears there will remain a split in control in the Senate and House of Representatives, so the next stimulus package might not be as large as people hope.  These “checks and balances” are, in my opinion, why the stock market has reacted so favorably thus far.

I see the next stimulus including:

  • Extended Unemployment Benefits
  • Emergency Renters Assistance
  • A 2nd Stimulus Check
  • Some Type of a State-Level Aid Package
  • Additional Triple P (Paycheck Protection Program) Funding

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Be Positive, Test Negative!

By:

Robert C. Intelisano CLU, CSA, LUTCF

The Insurance Doctor

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