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US Election | Economic and Tech Outlook

By Anthony Ginsberg


Big Tech Overview

Current predictions indicate the Democrats may not only win the White House, but enjoy a clean sweep in Congress (both the House and the Senate).  Democrats are known for a more activist Federal Government stance – with a focus on inequality, assisting minorities and climate change.   

Along with Amazon, Alphabet's Google and Microsoft are now among the top five contributors to Joe Biden's candidate campaign committee in the 2020 cycle.  This points to more leniency for Big Tech under a Biden administration.  It will certainly be less volatile and more rules based.  

Under a President Biden, corporate tax rates are expected to go back to 28% (currently 21%).  Capital Gains Taxes will jump too – mirroring a planned hike in income tax for earners above $400,000.  Biden’s goal is to raise $3-$4 trillion in taxes over a decade for education, health care and other social programs. The minimum hourly wage will likely rise to $15.  

Businesses expect far more regulation and red tape to be enacted under Biden.  This includes rejoining the Paris Climate Acord and embracing green tech and empowering the EPA to be more activist (Environmental Protection Agency – US Government agency).


Cloud Technology

Both Democrats and Republicans have found a mutual target: big tech companies. While they propose different policies, neither party is expected to be Silicon Valley’s savior.  Biden and Obama era policies are seen as more moderate – unlikely to break up Big Tech.  It is unlikely Biden will target specific Chinese companies.  Powerful technology companies are expected to face increased scrutiny no matter who wins the November 3rd election.  Trump would maintain regulatory scrutiny of Big Tech companies – including allegations of anti-conservative bias, antitrust investigations of internet giants such as Alphabet Inc.’s Google and Facebook Inc., and actions against Chinese-owned apps such as TikTok and WeChat.  Biden has also been critical of Big Tech’s market power.  Since large Cloud players mostly service businesses, it is likely their activities will remain mostly untouched by any anti-trust lawsuit. 


Tech Megatrends

Given Big Tech’s support of Biden, it is less likely he will pursue antitrust complaints against Google and others. It’s likely Biden would settle any antitrust cases brought by the Trump administration on lenient terms.  Biden has expressed concerns about the potential impact of tech innovations, such as self-driving vehicles, on the middle class. He proposes providing extra government aid to help workers who have been dislocated by tech.  Biden has come out against further subsidies for oil companies.   

He is also in favour of green energy and future cars that use clean energy (battery/EV vehicles). It is possible subsidies could be introduced to buy EV vehicles and taxes imposed on non-hybrid EV cars.  However this could be a huge cost to US taxpayers and threaten existing auto jobs.  Biden has also been outspoken about using government regulation to force “gig economy” businesses to pay benefits to their independent contractors, by reclassifying them as employees. (Uber etc).  It’s likely to add additional costs to certain gig workers and Big Tech firms.  

Trump could legislate to scale back protections social-media companies enjoy – currently giving them broad legal immunity for content posted.  Trump’s focus on social media bias would likely leave Apple and Amazon untouched.  China technology issues will remain – though Biden is less likely to target specific players – and follow a more rules based approach.


Healthcare Innovation:

Obama era public health insurance will be extended to move closer to a UK/EU style NHS program.  Government will play a far bigger role in the US healthcare system – increasing spending and insuring many millions of additional Americans.  While this will boost the number of insured citizens, new regulations may limit certain advanced private sector initiatives such as personalized medicine (AI and Gene Therapies).  Although telemedicine is already federally insured,  Biden says his health care proposal will expand Obamacare so that 97% of Americans are insured and cost $750 billion over 10 years. Biden is eager to introduce a public health insurance option (NHS style) - available premium-free to individuals making below 138% of the federal poverty level.  Stricter COVID related lockdown measures are expected under Biden, while Trump is much keener to open up the economy.

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