white house briefing room podium empty

Presidential elections are distracting in the best of times.

But this year, with the coronavirus looming over the country and economy and the political divisions so stark and heated, it just might become all consuming. 

With millions of voters expected to turn in mail-in ballots to social distance, the result might not come on election night, but weeks after. And once when the results are finalized, there are real fears that even if iconoclastic President Trump is removed from office at the polls, come the inauguration on Jan. 20, he might have to be removed from office by more direct means. 

That hint of constitutional crisis will be in the air this fall as the Democratic nominee, former Vice President Joe Biden, squares off against Trump in the press, on Twitter and in digital political rallies.

The more heated the contest, the more it will draw the attention of shoppers and the world.  

With good reason the stakes are always high, but this year they seem existential. 

In accepting his party’s nomination, Biden said Trump had “cloaked America in darkness for much too long” and that, if elected, he would be “an ally of the light not the darkness.” Trump, meanwhile, in his acceptance speech at the Republican National Convention last week, used similar words to describe Biden, saying the former vice president “is not the savior of America’s soul — he is the destroyer of America’s jobs and, if given the chance, he will be the destroyer of American greatness.”

Polling suggests that Biden is in the lead, although everyone is more wary of polls given how wrong they were in 2016. The Senate might also flip and the House of Representatives is expected to remain controlled by the Democrats, who have a real shot at steering both the legislative and executive branches, opening the possibility of sweeping change in government policy. 

So not only would a President Biden seek to reset relationships with the world, after four years of Trump’s “America First” agenda, he would be in a position to enact sweeping policy changes on everything from climate change to tax policy.

Just as Trump sought to dismantle the legacy of his predecessor, Barack Obama, Biden would likely go after the tax cuts that stand as the current president’s big legislative achievement. 

Goldman Sachs said it is the prospect of tax increases under Biden that investors are focusing on headed into the election.

In his speech, Biden referred to plans to rebuild the economy by upgrading infrastructure, creating 5 million new manufacturing and technology jobs, improving the health care and education systems and more.

“We can pay for these investments by ending loopholes and the president’s $1.3 trillion tax giveaway to the wealthiest 1 percent and the biggest, most profitable corporations, some of which pay no tax at all,” Biden said. “Because we don’t need a tax code that rewards wealth more than it rewards work. I’m not looking to punish anyone. Far from it. But it’s long past time the wealthiest people and the biggest corporations in this country paid their fair share.”

Goldman crunched the numbers from past company results and examined data from the Tax Foundation to estimate what that would mean for consumer companies if the Trump tax cuts were rolled back. 

The top line is that Trump’s 2017 tax tweak brought the statutory federal tax rate on domestic income down from 35 percent to 21 percent and Biden’s plan would bring the rate back to 28 percent — eliminating half the tax cut. 

On the whole, Goldman estimates that U.S. consumer firms would see their average net income fall 6 percent as their average effective tax rate moves from about 20 percent to 24 percent. 

Nordstrom Inc., Ross Stores Inc. and Kohl’s Corp. were among the companies seen taking a bigger hit in the tax cuts and losing 8 percent of their income.

An 8 percent loss in corporate profits might not register in the battle between “light” and “darkness,” but it is probably enough to register with fashion’s financial set.

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