The investment world is affected by many activities. At times it can be a very sensitive environment, which much like chemistry, requires a careful balance of the right ingredients. With the upcoming election, many are concerned about the results of the 2016 elections on the investment world. We can’t predict the fallout from the election of either Secretary Clinton or Mr. Trump, as the election is far-reaching in the scope of potential changes; however, we can shed light on a few elements you might want to consider.
A House Divided
The election of President and the potential restructuring of the Senate are two major factors to consider, as most agree the makeup of the House will not significantly change for either party. With that in mind, the U.S. Congress will continue to be Republican-controlled. However, the many changes that could result in the Senate could leave the Senate in Democratic control, leading to a divided house in the 115th Congress. This issue can be further convoluted when adding either Presidential candidate to the mix.
Regulations and Consumer-Protection
Proposed as a reaction to the 2008 financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in 2010. The Dodd-Frank Act gives the government control over regulating the financial services industry as a means to avoiding similar financial crises in the future. The Dodd-Frank Act attempts to protect investors and consumers from risky business practices, minimizes potential losses attributed to executive compensation for financial institutions , prohibits benefits and fees deemed to be excessive, and provides protection to would-be whistleblowers with information about violations.
How do the candidates react to the Dodd-Frank Act? Trump has repeatedly stated his administration would repeal the Act. Clinton has stated her administration would defend the Act and provisions, thereof.
Currently, federal income tax rates range from 10% to 39.6%, within 7 different brackets. Tax rates and proposals for changes have been a staple of a Presidential candidate’s platform for the last few decades.
What does each candidate propose? Clinton has laid out a plan for 8 tax brackets ranging from 10% to 43.6%, with a 4% surcharge for those with incomes of $5M plus. Trump proposes personal income tax rates comprised of 3 brackets with rates of 12%, 25% and 33%.
As for the capital gains tax situation, Trump would make no changes to the current rate and Clinton would develop a 4-bracket system based on income with rates of 0%, 15%, 20% and 24%. Both candidates support continuing to carry interest taxed as ordinary income.
Healthcare and Social Security
One of the most contentious issues today, in light of recent news regarding increased rates of healthcare insurance, is the future of the Affordable Care Act. Both candidates point to flaws in the structure of ACA and the need to repeal the ‘Cadillac’ tax, but they do not agree on a solution to the ACA
dilemma. Clinton supports ACA, but promises to include changes to make it more efficient and reasonably priced. Trump has vowed to repeal and replace ACA.
In past elections, strong allegations from one party to another regarding stripping social security benefits or the need to overhaul the system have been waged. Today’s candidates are much more mild in their responses as Clinton has suggested expansion of social security benefits to widows and home care providers, and Trump has not stated interest in making changes to the social security system.
We encourage you to voice your opinion with your vote!
Please note, we do not advocate either party or candidate and encourage your research of the issues to make an informed decision. Analysis provided is based on information provided by each candidate’s website and public statements. For practical reasons, analysis of other candidates, such as those representing the Libertarian and Green parties are not included.
For more details regarding the proposals from each candidate, please visit any of the following websites.
Major candidates’ sites:
Sites with comparisons of all candidates: