Some of the proposals that Joe Biden may introduce and how it will impact Investors and Companies:-
1. Boardrooms around America will sit up and listen.
A Biden administration can be expected to have a notable impact on corporate governance.
Things like the Corporate Executive Accountability Act and Affordable Capitalism Act, amongst other things, as well as the goals for diversity, gender equality and worker representation in board composition will likely be put forward. But probably the most notable change in Boardrooms will be the acceptable ages of Leaders of Industry. As is well known, President Biden will be, at 78, the oldest President ever to take office. Both he, and his 74 year old predecessor, just completed a gruelling campaign that would have taxed candidates half their age.
2. Trade relations with China
Joe Biden will be tough on China; his “Made In America” plan promises “aggressive trade enforcement actions” to defend against unfair practices from China or any other country “seeking to undercut American manufacturing.” He may wind back the the Trans-Pacific Partnership which Trump dismantled in the early days of his term, which until then was on track to cover 40% of the global economy as the world’s largest free trade agreement.
3. The Environment
The President has already signalled that he plans to re-join the Paris climate Agreement, which seeks to reduce Greenhouse gas (GHG) emissions to cap warming beneath a 1.5 to 2.0 degree C threshold.
This Agreement was better than previous actions because it included other big emitting countries like China and India. We have always known that climate action needed to be bigger than one country.
4. The Labor force
Biden proposes the following changes and could result in him being the most pro-union president in modern history –
- Increase the federal minimum hourly wage to $15
- Expand protections to victims of any workplace violations of federal, state or local labor laws
- Ban employers from requiring employees to agree to mandatory individual arbitration and relinquishing their right to class action lawsuits or collective litigation
- Eliminate non-compete clauses and no-poaching agreements that restrict the ability of employees to seek higher wages, better benefits, and working conditions by changing employers.
Biden has not hidden the fact that he intends to raise taxes by nearly $3.5 trillion over the next ten years on corporations and individuals earning more than $400,000 annually.
Biden has proposed a package of incentives aimed at cutting taxes for lower-income taxpayers, including refundable credits for everything from paying childcare costs to buying a home.
6. Retirement planning
Joe Biden plans to reduce the total available pre-tax savings (employer and employee) from (at the time) $51,000 to only the lesser of $20,000 or 20% of pay as a maximum. This allows a worker to defer a part of their pay for retirement savings purposes, and to avoid taxes until the money is ultimately withdrawn.
By 2021, Donald Trump would have reduced legal immigration by up to 49% since becoming President, according to a National Foundation for American Policy (NFAP).
Like Australia, reducing legal immigration mostly harms refugees, employers and Americans who want to live with their spouses, parents or children but it also affects the country’s future labor force and economic growth. The irony on the visa situation is that 30 out of 40 of the finalists of the 2016 Intel Science Talent Search had parents who worked in America on H-1B visas. So America needs to relax visa controls so they can attract the very best talent.
8. Getting Covid-19 under control
To get America back on its feet, it needs to get the disease under control and what he wants to do is urge a nationwide mask mandate for Americans when they are around people outside their household.
Goldman Sachs suggested a mask mandate would save the economy over $1 trillion and it has shown to have enormous impact in the spread. President Biden also wants to ensure that the cost of tests are free and to hire 100,000 people across the country to help with contract tracing and protection efforts.
9. Executive orders on day one
Democrats have pushed the newly elected president to use his executive powers to the fullest extent, as Biden might otherwise struggle to enact his agenda with only a slim Congressional majority.
The most notable are:
- The reversal of Trump’s decision to remove the US from the World Health Organization
- An executive action repealing two proclamations, informally known as the ‘Muslim ban,’ that restricted entry into the US from majority-Muslim countries
- A proclamation that will pause the construction of the border wall with Mexico and determine how to best divert those funds elsewhere
- An executive order directing the government to interpret the Civil Rights Act as prohibiting workplace discrimination on the basis of sexual orientation and gender identity, not just race, color, religion, sex, and national origin.
Well there you have it! The change in leadership will help unite the country and hopefully get America to participate globally as an example to democracy rather than fostering an exclusive introspective country at the expense of the less fortunate.
The real test will come at the end of 2021 when Joe Biden is about to turn 80 and may be finding the pace too hard to handle and he decides to pass the Baton to Kamala Harris.
I don’t think anyone would be surprised to see that happen.
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