Aug. 21, 2020

IMPACT OF A BIDEN VICTORY – ANGELO KATSORAS, GEOPOLITICAL ANALYST, NATIONAL BANK FINANCIAL

  • If the Democrats win the Presidency and the Senate they would be able to pass legislation more quickly. For example: taxation, environment, energy and healthcare.
  • Joe Biden supports increasing corporate taxes from 21% to 28%. (President Trump reduced corporate taxes from 35% to the current 21%).
    • Global average corporate tax rate is 24.18%
    • G7 average corporate tax rate is 27.65%
  • Biden would impose a 15% minimum tax on profits and would double the minimum tax on profits earned by foreign subsidiaries of US firms to 21% from the current 10.5%.
  • Top personal tax rate would increase to 39.6% from 37% for those earning over $400,000.
    • Capital gains and dividends would be taxed at the same rate as ordinary income for those earning over $1,000,000
    • Highest personal tax rates were in the early 1960’s at 91% (yes, that is correct, 91%!)
  • Biden would like to build on the Affordable Care Act (aka Obamacare), potential cost $750 billion over 10 years.
  • Most expensive proposal is a $2 trillion, 4 year green energy plan.
  • NBF Economics and Strategy projects that the increased debt could lead to a replay of the aftermath of WWII…US government kept interest rates below the rate of inflation for many years to gradually reduce debt levels.

BACK TO SCHOOL

  • Check with your children’s school so that you have a full understanding of what precautions and changes are taking place.
  • Obtain the most current information available as the science around COVID19 and the protocols are continually evolving. We are learning more about this virus every day.
  • Children generally seem to experience very mild symptoms and the hospitalization rate is 8 per 100,000 vs 164.5 per 100,000 for adults (US CDC statistics from March 1 – July 25)
  • UK study found that the rate of type 1 diabetes in children diagnosed with COVID19 nearly doubled during the peak of the pandemic.
  • US added teachers to an “advisory list” of essential workers in a push for schools to reopen.
  • Many universities in North America are opting for online or a hybrid version of classes including University of Alberta, Notre Dame, North Carolina, NYU, Michigan State etc.

CANADIAN FEDERAL GOVERNMENT RESET

  • Prime Minister Trudeau has prorogued parliament until September 23rd and named Chrystia Freeland as Finance Minister in addition to her role as Deputy Prime Minister.
    • Ms. Freeland will no longer spearhead US relations
    • Speech from the throne on September 23rd expected to highlight a green recovery and new social platform
  • CERB has been extended to September 27th. Canadians who were already eligible for EI will transition to that program when CERB ends.
  • There is a potential for a November election in Canada.

TIDBITS

  • Immigration to Canada dropped 64% to 34,260 in Q2.
  • Iran displayed a surface-to-surface ballistic missile with a range of 1,400 km as well a new cruise missile.