2020 Best Practices Study

will change as a result of the upcoming elections, and what strategies should Best Practices Agencies pursue today to best prepare?

In our view, if Donald Trump is reelected, the current political environment will largely stay the same. If Joe Biden wins and delivers Democrat majorities in the House and Senate, massive change is likely.

Based on current polling in battleground states, a Democrat sweep is a very real possibility. Given this, it is prudent to think through the changes that would likely accompany a Biden victory for the industry and plan accordingly.

The Biden / Democrat platform calls for material changes to the tax landscape, including:

Elimination of the “Step - Up” Basis in Estate Taxes

Increase in Personal Income Tax Rates

Increase in Capital Gains & Dividends Tax Rates

Rise in Corporate Taxes

• High wage-earners would be taxed at 39.6%, rather than the current 37%, with capped and potentially eliminated deductions.

• Rates will increase from the current 20% base to as much as 39.6% for high wage- earners.

• At the death and transfer of the estate, there will likely be a shift from zero taxes on the transfer to a charge of 39.6% capital gains rates on the assets in the estate regardless of whether assets are sold.

• In 2017, C-corp taxes dropped from 35% to 21%. Biden is discussing raising them to 28%, but some suggest the tax rate will be raised 1% per year to moderate the impact on earnings. The 2017 tax benefits given to pass-through entities will likely be reduced or eliminated as well.

Consider, too, other changes that would likely accompany a Democrat sweep in November and how this might affect your customers, specialty areas of focus and lines-of-business:

• More regulation on business . A less business-friendly environment • Oil and Gas. A de-emphasis on oil and gas and more focus on renewable energy sources • Health Insurance . Biden has not stated support for Medicare for All or a single-payer solution, but rather supports making changes to Obamacare • Trade. With Biden, we will likely see more certainty and less volatility as respects trade wars, tariffs, etc. (a less confrontational approach than Trump) • Climate Change . Federal lands may be closed, carbon taxes are likely, no new pipelines • Market Stability. Some pundits suggest that a Biden presidency will bring some level of calm and predictability to the stock market, even in light of the above

So, how might all this affect insurance agents and brokers? The impact would likely be felt in several specific areas, including:

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