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President Donald Trump started 2020 presiding over a strong U.S. economy, one that may have carried him to a second term. But severe disruption from the COVID-19 pandemic has narrowed his chances and bolstered those of his rival, former Vice President Joe Biden.
“This entire climate has just been shaken like a snow globe, and we don’t know what’s up and what’s down,” said Jake Sherman, a senior writer for Politico, speaking about the political environment during ACG’s virtual Member Summit in June.
The leveling of the playing field has raised questions within the middle-market M&A community about what to expect should the presidency or Congress shift to Democratic control.
Tax and trade policy have the potential to impact growth prospects for businesses across sectors and will likely play a role in future M&A and investment decisions. Meanwhile, heavily regulated industries like health care could see significant change if Democrats were to secure majorities in Washington.
“Joe will come in with a more progressive economic policy than we have seen from a Democrat in a long time,” Rep. Don Beyer, D-Va., and vice-chair of the Joint Economic Committee, told the Wall Street Journal in May.
Under Biden’s proposed tax plan, the corporate income tax rate would rise to 28% from 21%—still lower than the 35% tax rate before the Tax Cuts and Jobs Act. Biden has also voiced support for a hike on capital gains taxes, which could potentially delay or mute M&A activity.