President Donald Trump has accomplished economic records despite a presidency plagued with, well, a pandemic. Along with the millions who legally voted for President Trump to be re-elected, apparently, investors also see a downside to a Biden administration. A newly released CNBC survey asked “100 chief investment officers, portfolio managers and CNBC contributors who manage money about where they stood in the upcoming year for stocks under a new administration.”
“Fully two-thirds” of respondents said the first four years of a Biden presidency will be “worse for stocks” than President Trump’s term. CNBC’s analysis reported, “since the president was inaugurated Jan. 20, 2017, stock indices have skyrocketed, including the S&P 500, which has grown 60 percent ‘thanks in part to the president’s landmark corporate tax cut’ that created soaring profits ‘and a record in share buybacks.”
Specific concerns of those surveyed are fearful that Biden “and Democrats if they wind up with control over Congress following next month’s two Senate run-off elections in Georgia – will make good on pledges to reverse Trump’s tax cuts.” Trump’s corporate tax rate was lowered from 35 percent to 21 percent; Biden has promised to raise it back up to 28 percent.
Biden told Wall Street donors, “I’m going to get rid of the bulk of Trump’s $2 trillion tax cut…And a lot of you may not like that but I’m going to close loopholes like capital gains and stepped-up basis.” Economists argue raising the corporate tax rates again will reignite the so-called ‘corporate flight’ which occurred in April 2016. A “Made in America exodus” occurred during the Obama-Biden years, with at least 10 “iconic U.S. companies” relocating their corporate headquarters in lower-tax countries.