Will Biden Be BAD for Your Business?

Will Biden be good for business or will he hurt business? That's what we'll talk about in this video. Right now we have a couple of camps. We have those who say that Biden will be bad for business because he wants to raise taxes, increase regulations, and who knows, we might even have another government shutdown. And then there are those who think that Biden will be good for business because we might see an increase in minimum wages, we might see more government stakeholders, stimulus. And Biden may also usher in new things like stimuli for green energy, which might be good for everybody. Tell them to bring me my money.

My goal in this video is not to convince you either way. My goal is not to persuade you politically. We're just going to analyze what we know about the Biden administration and look at how that might impact entrepreneurs and business and even the economy overall. But before we go into any of that, it's important to note something that I think trumps everything that we'll talk about in this video. If you are waiting for the president to make a change, for you to grow your business, or for you to change your life, you have already lost the game. If you think about your life, it's kind of like you're the captain of the ship and the government is the ocean. The government can blow wind in your direction and it can hurt you or help you get somewhere faster, and it can send waves that make your journey a little bit rocky. But you are still the captain of the ship. You are still deciding where the boat is going. You are still the one navigating the changing weather, and you're still the one in control of the steering wheel. So if you think of your life like you're the captain and the government is just one of the factors, then you don't have to be so tense about who the president is or what possible policy changes are coming your way. Over the last hundred years, every single president has experienced times of expansion and times of recession. And sometimes that has to do with government policy. But most of the time it's just because of market forces, because economies expand, businesses grow. The most powerful force in the world is free people who are trading with one another, who are transacting with one another. That's what makes an economy grow, not government policy. It has everything to do with free people coming up with new ideas and new businesses and new solutions. And the best thing that you can do for your own personal economy, for your own personal wealth, is for you to remember that you're the captain of the ship. For you to be clear on where you are going, and most importantly, to hit that like button on this video that will make more of a change in your economy than what the president does. Seriously, we talk a lot about building businesses and investing the profits here on this channel. And you going through content, mine or someone else's will do more for your own personal growth than how you vote. All right, thank you in advance for tapping that like button. Now, let's actually look at the policies that we know about the Biden administration and analyze how they might impact the economy and your business. The first thing that most people talk about when they're looking at Biden's possible policies is tax rates. Biden administration has been very forthcoming that there's a good chance taxes could go up under President Biden. When we look at the actual numbers, they're a little bit easier to swallow than most people think. The corporate tax rate has been proposed from going from 21% to 28%. And the personal top tier tax rate could go up to 39.7%, which is what it was before the election of Donald Trump. So these tax hikes are more of a return to what they were before Donald Trump and aren't that big of an impact on the economy. However, there are other taxes that are being worked into the system, like an increased payroll tax that could have a much more significant impact on hiring and wages and the growth of the economy than the increase of marginal tax rate. However, with that in mind, businesses have grown during times of higher taxes, just like they've grown during times of really low taxes. And under the Trump administration, we had very low taxes, the lowest that we've had in decades. And the economy responded to that. But one thing that people miss during presidents who raise taxes is that there's usually more loopholes that become available during those presidents as well. The tax code is super complicated. And one of my friends, Tom Wheelwright, likes to say that the tax code is really just a book of incentives. It tells you that you have to pay taxes unless you do these things. And then it is just thousands of pages of loopholes in the tax code. And when taxes go up, so do the amount of loopholes that become available. Now, loopholes is a little bit of a dangerous term because people see that as entrepreneurs and rich people skirting around the system. And sometimes that happens, which is what, why higher taxes don't hurt big businesses as much as they hurt small businesses. So if you can afford a really big legal team to help you move funds around and to be able to come up with shell entities and all kinds of things, then higher taxes don't affect you as much as they hurt the middle class and small businesses. But in the grand scheme of things, the tax rates that have been proposed are not a significant change from where we are right now. So the biggest point that people make about Biden administration is that tax rates will hurt businesses. But overall, I think that's kind of a weak argument, because if tax rates are the thing that really cripple your business, you probably don't have a very good business. And if you don't have other ways to offset those increases by knowing the tax code, a little bit of education or hiring one good accountant can completely erase that increase in your tax bill. So my personal opinion is, is that the proposed tax changes aren't fun. They're not what I would prefer. I like for tax rates to be as low as possible, but I don't think they're going to change my business or any business that is doing a good job of serving their customers. The second thing that could have an impact on the economy from the Biden administration is the regulatory changes, the regulations that Biden will roll out, basically how he will use government to influence business decisions and the economy as a whole. And we just are having a few peeks into what that might look like, especially with Joe Biden tabbing Janet Yellen as the treasury secretary. Now, if you don't know, Janet Yellen was the chair of the Federal Reserve under Barack Obama. And Janet Yellen's overall policy was an inflationary policy that means keeping interest rates really low and allowing for there to be more money in the system. Now, what that can do is stave off recessions, but what it also does is it makes big business bigger. What you may have noticed is that when the election was called for Joe Biden, the stock market surged. And one of the reasons that it surged is because the same policies that worked for the stock market under Barack Obama might come into the Biden administration. And so when Joe Biden tapped Janet Yellen as the Treasury Secretary, that was a big win for the stock market. Inflationary policies, meaning putting more money into the system, are great for big businesses. They're great for the stock market. They make the price of things go up. They're good for the housing market, but in my opinion, they hurt the middle class and they hurt small businesses. The reason for that is because prices go up. If you want to start investing in stocks and you start investing during an inflationary period, it means that you are investing At a time when prices are high and dividend yields are low, it means that you've got to inflate even more in order for the value of your investments to go up. And if you're buying a house and you're a first time home buyer, you're going to get a great rate on your mortgage, but the price that you pay is going to be the highest that it could possibly be. That's what happens when interest rates are kept really low. And when Joe Biden picked Janet Yellen as Treasury Secretary, it was assigned to the markets that that type of inflationary policy was going to continue under Joe Biden. My opinion on this is, is that it's great for big businesses and it hurts small businesses. Remember this phrase, big government is good for big business. Small government is good for small businesses. When we have a big government and a government is really active in the economy, it can pick winners and losers. It can create government contracts, it can create policies that help that specific sector or that business. And sometimes that's just well intended, but it gives favorable market conditions, it gives smooth sailing to big businesses, but it can really make it difficult for small businesses to get a foot in the door and start to succeed. A good example of this would be the energy sector. When Barack Obama was elected, he was elected under the understanding that he would usher in a new era of green energy. But what actually happened is that oil companies had their biggest expansion ever. Now, why would that be the case? Well, Barack Obama brought in new regulations on the oil industry and that made it harder for small companies to get into the market. That made oil more expensive and it allowed for the established oil companies to have a foothold in the marketplace. Donald Trump undid all those regulations. And what happened was that the big oil companies really suffered and they're actually going through times of unprecedented losses. Now, some people will say, yeah, but that's just because there's a recession going on. People aren't driving as much, they're not consuming as much. But oil companies did extremely well during the last recession. The reason that they're not is because the decrease in regulations has made oil prices cheaper. So because government got out of the way, oil companies that had a foothold in the marketplace didn't have so much control in the marketplace anymore. When government expands, it helps the businesses that are already established. And when they shrink, it helps the businesses that are new and that are growing. So from an entrepreneurial perspective, we should want there to be as little government as possible and for there to be as little involvement in your industry as can possibly exist. Another example of this is the Internet. The government has mostly stayed out of the Internet for most of its existence. And that's why there's been so much opportunity for Internet entrepreneurs to start businesses and to build audiences and to build platforms that make them millionaires in a very short period of time. If the government comes in and starts regulating speech on the Internet and picking winners and losers, and it can start to harm that marketplace and make it more difficult for people like you and me to start businesses online. My take on this is that we might see a boom in the stock market, we might see a boom in housing prices in the short term, but if we continue the inflationary policies that existed under both Barack Obama and Donald Trump, then we will continue to create a divide between the richest and the poorest in this country. And that's not good for anybody. There's also a chance that this has an increase in prices of cryptocurrencies like Bitcoin and Ethereum, because we see individuals, even thought leaders, starting to lose trust in government regulations and government policy. And so they're turning for alternative ways to store money and to store value that are not within the control of. Of politicians. Now, I have my conflict about the value of cryptocurrency, but I think it goes to show that as a society, we're starting to realize that politicians can't control your life, that politicians don't have the ability to decide what kind of success you enjoy. That is always in your hands. And if you're giving that power over to politicians, then you are already dead in the water. Now, the final thing, and in my opinion, the most impactful thing that will come out of the Biden administration is how they decide to handle COVID19. If there is a government lockdown, it is bad for all small businesses. Notice that I said small businesses. Big businesses will be fine. Big businesses might even grow. We're starting to see that already there are big businesses that have doubled, tripled, some have even 10 xed during the coronavirus panic. Now, that's because they have enough cash flow, enough capital, and enough of a foothold in the marketplace to be able to withstand something like that. But most entrepreneurs on the street, most businesses in your community, cannot survive a government lockdown. And so if we go into that, it will be a big win for big businesses, and it will drastically harm small businesses. So we sit in this interesting position right now of Biden may do things that make things look better on the surface, like the stock market. Could go up and GDP could go up. But what will also happen is that Main Street Americans could suffer from that. And so the solution to this is to continue to invest in assets that put money in your bank account, like dividend paying stock or cash flowing real estate or your own business. And the most important thing for you to remember is that you are in control of the results that you get. Not politicians, not the government. They can have a small impact on the opportunities that come your way. And if you blame anything outside of your locus of control, then you are giving your power to things outside of yourself. You are giving your power to the President, you are giving your power to politicians. No one wins by giving up their power. They simply outsource their power to somebody else and they can use that to hurt you. If you want to win, bet on things expanding. Economies expand, governments expand. Opportunities expand. Heck, the universe expands. And regardless of who the President is or which political party is in power, you always have the opportunity to expand. And you don't expand based on what government policy is. You expand based on what you think about, based on the books you read, based on the media that you consume, based on the people that you hang out with, based on how you contribute to your community. That's how you expand. And there is always an opportunity to expand. Some of the biggest companies in the world were started during recessions. Some of the most successful businesses that have ever existed started because there were no other options, because there were no other opportunities. In fact, my opinion is that during hard times that's the best time for you to create something new. It's the best time for you to start over is the best time for you to go into a different direction. And there is always opportunity for you to grow and to expand regardless of who the President is or who is in power right now. Government can certainly make things harder. But freedom, capitalism and free people cannot be stopped. It's the most powerful force in the world. And so if you bet on yourself rather than bet on what somebody else is going to do, then you will always have the possibility to win. My name is Ryan Daniel Moran. We're capitalism.com and we help entrepreneurs build businesses and invest the profits regardless of who is President or what is happening in the economy. If you want to join a community of like minded entrepreneurs, we'd love to help you on your journey. Hit the subscribe button and we hope to see you on the next video. Thanks for watching.