Regulatory and tax changes will be two important issues to watch depending on who wins the White House, but Jeff Bush of The Washington Update is urging advisors to brace for what's ahead after the Nov. 5 presidential election.
"Pardon the cliche, but the United States is setting itself up for a 'perfect fiscal policy storm' in 2025," Bush told ThinkAdvisor Wednesday in an email. "We'll likely have two budget debates, on top of a debt ceiling debate and a tax reform debate, all coming together next year. I don't think the markets and investors have realized that yet. While I believe the markets will perform fine, it could be a choppy climb in the markets because of the headlines that will dominate the media throughout the year."
We caught up with Bush to get his insights on how the tax and regulatory landscapes will shape up under a Trump or Harris administration, and who may win the White House.
THINKADVISOR: How would tax policy differ in a Trump versus Harris administration, and in which key areas?
JEFF BUSH: There are significant differences between the candidates and what direction they want to take our tax policy.
Former president Trump wants to extend the [Tax Cuts and Jobs Act] TCJA for another 8-10 years. He'll need Republican House and Senate majorities to get this done under the reconciliation rule. He's also said he would like to add some populist elements to the TCJA — for example, tax-free tip income, Social Security, overtime pay, and tax-deductible car loan payments. If the GOP sweeps in November, we'll hear about these populist changes, but I don't believe they will be included in a final tax bill.
Vice President Harris wants to increase the slope of the tax code's progressivity. This means higher income, higher net worth, and corporate Americans sharing a larger share of a larger tax burden. Harris suggests a return to the 39.6% highest marginal rate, a wealth tax, higher capital gains rates for high-income filers, and a higher corporate rate. She would only get her tax proposals done if the Democrats swept in November. I don't see that as likely at all.
