Welcome To The New Season; Election Season
As I write this, our weather has finally taken a break from the heat, the leaves have started to change colors and we are undoubtedly moving into a new season..which can also be described as election season. American minds are focused on what has proven to be a historic election with an astounding number of votes already counted. The amount of decided early voters is polarizing, and in an effort to continue to educate on the changes in either direction, I am noting those potential changes in this newsletter. Here we will take a look at potential healthcare, tax law, and market changes that we may have to adjust to…in either circumstance.
What Will Happen With Healthcare
Despite the high levels of uncertainty looming over the upcoming election and potential headline noise surrounding the healthcare sector leading up to the election, I believe the healthcare sector will see limited long-term impact. The reelection of President Trump would be largely status quo with some changes around drug pricing(The most notable executive orders center around eliminating drug rebates and creating international referencing pricing for drugs on Medicare Part B and Part D), while Joe Biden would seek to expand the Affordable Care Act which would be a positive for the healthcare sector. A potential public plan option or drug pricing reforms would be less favorable for the sector, but, again, we view any true changes as being incremental as opposed to transformational.
A Few of the Proposed Tax Priorities in the Biden Platform:
an increase in the top marginal rate to 39.6%
(For households earning more than $400K)
an increase in the statutory corporate tax rate from 21%
to 28%
households capped at 28% for itemized deductions
1031 exchanges eliminated for household incomes over $400k
estate tax exclusions back to old level of $5.79 million for individual
first-time homebuyer credit up to $15,000
potential elimination of stepped-up cost basis at passing
Bottom Line
History has shown that markets are resilient through election cycles and changing policies. Even as potential changes in taxes loom, investors would
do well to stick to their long-term goals, and look into their current tax situation for implementing tax-efficient strategies, regardless of who wins
Disclosures:
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.