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2020 is bound to be unusual. Faced with a new president who was strongly advocating tax increases, granting great union powers, and working to strengthen corporate oversight, CEOs in the American business community displayed an unprecedented welcoming attitude.
As the new incoming president, Biden is definitely not a friend of big business in America. However, whether its policies can be implemented in detail or not depends largely on the future pattern of the Senate, and all is difficult to say. But the truth is that Biden has announced to the public several specific measures that he will do everything possible to take. Biden, who has been in politics for 50 years since 1970, has a clear thinking.
If you want to use one phrase to summarize the trends of Biden’s economic policy, then it is: the middle class and the proletariat take priority, and the rich should come second. Biden cannot be called a communist, for most of his political career, he is more focused.
But last summer, the centrist said bluntly in an important speech in Dunmore, Pennsylvania: “It is not the capitalists on Wall Street who build America, but ordinary people, who may be your neighbors or for you. . ”The people of Dunmore have always been the target of Biden’s attempts to win over.
Therefore, from the business reform policy advocated by Biden, we can also see his ideological trend.
Increase corporate tax
Biden made it clear that raising corporate taxes would be his “first priority” after taking office.
The Tax Cuts and Jobs Act introduced by Trump in 2017 once lowered the maximum corporate tax from 35% to 21%. If Congress approves Biden’s policy in the future, the number will rise again. 28%. He also emphasized: “We do not encourage multinational companies to develop abroad, and the income of the company abroad must pay double taxes.” At the same time, Biden will also support domestic or foreign companies that return to the United States and are green, green Investment-oriented companies offer tax incentives.
Increase personal tax
Biden will increase personal income tax in a number of ways.
First, the maximum personal income tax will increase from 37% to 39.6%; second, people with an annual income of more than $ 400,000 will have to pay additional social security taxes, and people with an annual income of more than $ 1 million will also have to pay an additional tax on capital gains; Finally, current itemized deductions for people with an annual income of more than $ 400,000 will be reduced, while low-income groups will enjoy more tax credits in the future.
“My guiding principle is: common workers and the rich should be rewarded at the same level,” Biden said.
Strengthen union power
“Strengthening union power” is also at the core of Trump’s political policies.
“The union created the middle class.” Biden said, “With the union, we have the middle class. If we want to solve the problem of abuse of power in the American corporate system, we must use another third-party power system to restrain, this third-party Power is the ‘union.’ Biden promised that he will help the union in a number of ways while also providing workers with more up-to-date legal protections to promote a balance of power.
He also promised that he would treat employers more strictly and further increase the protection of employees of American companies, regardless of whether they join a union or not. As the Democratic Party stated on the campaign platform, “they will increase the funding and staffing of the Department of Labor and actively implement relevant regulations on employee wages, hours of work, health and safety.”
Implement new regulations
In addition to the union-related changes, Biden also intends to introduce more new regulations, including: (1) increasing the minimum wage to $ 15 per hour; (2) establish a public credit reporting agency for federal loan programs; (3) revitalize the Consumer Financial Protection Office; (4) Elimination of mandatory arbitration clauses in employment and service contracts; (5) Add up to 12 weeks of paid family leave or medical leave for employees; (6) Strengthen corporate merger and acquisition review Work and so on.
Deepening Obamacare Reform: Launching “Public Health Insurance”
Biden will implement a “public health insurance” policy that will benefit everyone. It will allow the medical system to negotiate the price of prescription drugs and allow the importation of low-cost drugs, and the United States healthcare industry, which is the largest in the United States and accounts for 18% of all economy, you will generally abhor these measures because they would undermine or even destroy the industry has a fairly wide sphere of influence.
Increased investment in infrastructure by US $ 2.4 trillion during the mandate
This is a move that most industries generally support, and it stands to reason that it is relatively easy to implement – lawmakers in Congress hope to get federal funds back into circulation, so they are united at this time.
But when Trump was president before, he also wanted to introduce an infrastructure bill in accordance with his wishes. The conflicts between the parties were so fierce that Congress could not agree on the details for four years. It will be extremely difficult for Biden to significantly improve this situation.
A broader perspective
A broader question is: How will Biden affect the entire American economy? It is still hard to tell and there are different responses from all walks of life. No president can make major changes in fiscal policy alone; it depends mainly on Congress.
And monetary policy is almost completely out of the president’s control. A Moody’s Analytics study concluded that Biden’s election as president will provide more jobs and increase people’s incomes than Trump’s reelection, while Stanford University’s Hoover Institution has come to the opposite conclusion. Research from Princeton University (Princeton University) shows that there is little evidence that the president can influence the direction of the economy.
Why do many CEOs celebrate Biden’s victory, who seems to be against them? There are some reasons for your own special interests, which require specific analysis of specific topics, but some reasons are general.
Specifically, compared to Trump, Biden is unlikely to escalate the trade war, not just against China, but also against America’s allies, especially Europe, Canada, and Mexico. For every company that benefits from such tariff barriers, dozens of other companies will suffer from rising import costs and retaliatory increases in export tariffs.
Also, Biden may not be as threatening to immigrants as Trump. Industries like agriculture, construction and technology are particularly dependent on immigrants, yet the various restrictive measures implemented by Trump after he took office and statements made to cite the war have deeply disturbed them, and immigrants feel fear and are not welcome.
Certainly, Biden will not open the door to America; He doesn’t want immigrants to take jobs from American union workers. But he said it will provide relevant route planning for immigrants without legal documents, tell them where and how they can obtain citizenship, and eliminate potential conflicts in the workplace and community.
The main reason many business leaders have joined Biden is that they can no longer endure the chaos under Trump. Businesses pursue a stable, predictable and clear situation. On the other hand, Trump continued to despise and make hasty decisions on issues that could have a major impact on business: setting up tariff barriers, shutting down the country, imposing retaliatory taxes on businesses, and leaving NATO – all exhausting entrepreneurs.
As many people say privately, as long as they know the rules, they can compete, but if the rules are constantly changing, they cannot compete and maintain a normal market order.
Perhaps Biden is still far from the ideal presidential image in the hearts of American business. But after the last four years of chaos, he will do well. (Chinese network of fortune)
Compiler: Chen Yixuan, Chen Congcong
