The outcome of the 2020 election is likely to influence how the nation addresses various issues of importance to impact investors, from climate change to income inequality. Here is a look at each candidate’s position and track record on three key areas—and what they could mean for impact investors.
The candidates have opposing views regarding environmental issues. Since his inauguration, President Donald Trump has rolled back close to 70 environmental regulations, according to the New York Times. In 2017, he also announced that the US would withdraw from the 2015 Paris Agreement, a global accord intended to reduce global warming.
On the other hand, the Cornell Daily Sun reports that former vice president Joe Biden backs reengaging with the Paris Agreement, plus an end to burning fossil fuels by 2050 and significant investments in green technology, among other proposals. He has also pledged to undo the Trump administration’s regulatory reversals.
Advocates for the current administration’s approach say reducing regulation is essential to boosting the economy, while Democratic proponents contend that more regulation means both a cleaner environment and long-term economic strength.
The two sides vying for office in the 2020 election also differ on the issue of taxes. In 2017 President Trump championed a tax overhaul, reducing the corporate tax rate from 35% to 21% and introducing tax cuts for individual income, among other things. He now seeks to extend those changes. As for capital gains, the president recently said he is “seriously” considering a tax cut.
The Democratic platform proposes tax increases on corporations and the wealthy, along with reversing the 2017 corporate tax cut. Biden is also proposing changes to capital gains tax rules, raising the top rate to match taxes on ordinary income.
While President Trump sees his tax proposals as an economic engine, Biden views the Trump tax cuts as a corporate windfall, benefiting the wealthy. Some suggest that tax increases could help the government finance more stimulus efforts, thereby boosting the economy.
Health insurance plays a major role in both platforms in the 2020 election. During his presidency, Trump has attempted to repeal the Affordable Care Act (ACA), taking such steps as effectively eliminating the ACA’s individual mandate in the 2017 tax bill. The administration has also supported introducing caps on Medicaid spending growth and converting the program to block grants.
Biden aims to protect and support the ACA, also proposing a healthcare plan that would be paid for through increasing taxes on the wealthy. The plan calls for a Medicare-for-all–like public option to serve as an alternative to private insurance. Like Trump, Biden supports measures to allow importing prescription drugs from foreign countries.
While impact investors will be tracking these and other issues as November approaches, it is important to remember that the outcome is far from certain, as is the implementation of either candidate’s plans.