Biden’s Tax Plan Could Cut S&P 500 Earnings By 12%, Goldman Sachs Warns

  • Date: 14-Jul-2020
  • Source: Forbes
  • Sector:Economy
  • Country:GCC
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Biden’s Tax Plan Could Cut S&P 500 Earnings By 12%, Goldman Sachs Warns

TOPLINE



 If he's elected in November, Democratic candidate Joe Biden's tax policies could have a major negative impact on earnings for companies in the S&P 500, according to Goldman Sachs analysts. 









The presumptive Democratic presidential nominee Joe Biden speaks at McGregor Industries on July 09, ... [+] 2020 in Dunmore, Pennsylvania.



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KEY FACTS







Goldman's researchers, led by David Kostin, expect Biden's tax plan to reduce their S&P earnings estimates by 12%, from $170 per share to $150 per share. 







That estimate is based on several likely Biden policies including raising the statutory federal tax rate on domestic income by 7%, doubling the tax rate on certain foreign income, imposing a minimum tax rate of 15%, and creating an additional payroll tax on high earners. 







The researchers also expect Biden's tax policy to create a drag on earnings that's comparable to the boost companies saw after the 2017 Tax Cuts and Jobs Act (and the corporate tax benefits that came with it). 







Goldman's analysts say the chance of a Democratic sweep in the fall has increased "substantially“ since February and now stands above 50%.