There is a real possibility of a contested election
It’s important to consider that Election Day may not end with a clear result. Not only is the race expected to be extremely close, but the increased reliance on mail-in voting amid the pandemic could cause delays in counting, and result in no answer until the electors meeting on December 14. For investors, that may be too late for year-end tax moves. “If you’re not going to get resolution on the election until December 14 and you have critical tax deadlines on December 31, I really believe the planning work needs to start now,” says Clifton. “I expect the next two months to be the wildest two months of politics we’ve ever seen in our lives.”
COVID-19 has accelerated political volatility
Of all of the forces driving volatility ahead of the election, the coronavirus pandemic is perhaps the most significant, says Clifton. “The pandemic has changed everything about this race. Everything.” With data suggesting a correlation between the COVID-19 positivity rate and worries about the virus among swing-state voters, it’s possible that what happens with COVID-19 over the next two months will heavily influence the outcome of the election.
The tax implications of a Biden win could be significant
The tax changes Democratic candidate Joe Biden has proposed could have huge ripple effects on wealth planning. “Any type of wealth is being targeted here without it being directly targeted,” says Clifton. It’s looking increasingly likely, however, that these potential changes won’t be enacted immediately if Biden wins, as containing the fallout of the coronavirus pandemic continues to be the top priority.
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