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Beef Magazine Oct 29, 2020

How would a Democrat-controlled White House and legislature affect ag?

Here’s a look through a conservative lens at the major issues in the Democratic Party’s platform.

After nearly four years of a Trump Administration, we know its record and approaches. But what would a Biden/Harris win mean and what would the Democrats favor if they gain more power in Congress?

How much government to have in agriculture is a battle waged for decades. Some of the things the Democrats have discussed would affect agriculture as a business, some affect consumers and some would affect agriculture directly.


Taxation is a big issue as it affects economic growth, as Trump and Congress demonstrated with the tax reform in 2017. Biden’s position has been that the Trump tax cuts hurt the economy by reducing federal tax collections. Actually, tax receipts grew by only 2.2% in the two years before the cuts and 5.3% in the two years after the cuts.

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As for corporate tax collections, in the two year before the cuts, corporate tax collections dropped 25.4% but grew 11.4% after the cuts. During the same time periods, business investment grew 4.7% before and 11.9% after. Gross Domestic Product (GDP) grew by 5.9% in the two years previous and 9.7% after. And median household income advanced 6.8% in 2019 alone. All this data is from Ernie Goss, professor of regional economics at Creighton University.

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Early in the campaign, Biden said he wanted to raise corporate taxes again but not to the previous 35% level. Harris wanted to roll back the cuts to the old level.

From another perspective, Lawrence B. Lindsey, a former Federal Reserve governor and White House advisor in 2001-2002, pointed out how different economic policies affect unemployment and growth. In December 2016, the Fed predicted unemployment of 4.5% for 2017 and 4.5% for 2018, evidently figuring that further reductions were impossible. Instead, 2017 ended with 4.1% unemployment, 3.9% in 2018 and dropped to 3.5% in 2019, the lowest in decades. (“The Trump Boom Is Real,” Wall Street Journal, 10/26/20).

As for economic growth, the Fed estimate hit low for all three Trump years: 0.7 GDP points too low for 2017; 0.5 for 2018; and 0.4 for 2019. During the Obama years, the Fed overestimated growth in 2009 for 2011, estimating too high by 2.6 points, predicted 1.7 points too high in 2010 for 2011 and 2.5 points high in 2012. The Fed’s models overestimated the potency of fiscal and monetary stimulus and underestimated the benefits of reducing the cost of capital and deregulation, Lindsey said.

As for capital gains, the Democrats in general want to increase them again. Since they tax investment and stocks, they contend that lower rates benefit the “wealthy.” However, small businesses, including agriculture, plus pension, stock and insurance funds benefiting many...


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