Leonard Bickwit Jr.
Apparently, there’s widespread dissatisfaction among CFOs about the choice between Hillary Clinton and Donald Trump for the next president of the United States.
During an interview about last week’s CFO 2016 Presidential Election Survey, Steve Underhill, the treasurer and controller of R.O. Whitesell & Associates, seemed to sum up the views of many survey respondents: “I think it’s an absolute shame that in a country the size of ours and with the history of ours that we’re down to these two candidates for president.”
Be that as it may, U.S. voters will be presented with the prospect of a choice between them, and senior financial executives will ultimately have to begin grappling with the practical effects of the outcome. To help our readers get a step up on that challenge, CFO asked a number of experts to express their opinions about which of the candidates would do a better job of steering the U.S. economy.
Not surprisingly, the thoughts of most of them went directly to the issue of corporate taxation – the economic area in which Trump and Clinton seem to differ most markedly. The matter is a vexing one, as attorney Leonard J. Bickwit suggests. Quoting Trump himself, Bickwit thinks the real estate executive would be “a disaster” for the nation on most counts and plans to vote for Clinton. But “Hillary’s plans for tax reform are seriously deficient” in terms of generating economic growth, he writes.
“Lowering the corporate rate has been supported not only by nearly all congressional Republicans, but also by the Obama administration and, perhaps with less enthusiasm, by most congressional Democrats,” Bickwit writes. “I am strongly with the consensus on these points. So is Donald Trump. Hillary is not.”
Inferring Clinton’s position from other stances taken by her campaign, Bickwit feels that Clinton’s commitment to infrastructure spending will claim the dollars needed to fund cuts in the corporate tax. If the tax isn’t reduced, “the economy will suffer the consequences,” he writes.
But how would a President Trump fund the large reductions he’s proposing in individual as well as corporate tax rates? “Even coupled with a small number of loophole-closing changes, Trump’s plan would blow a $12 trillion hole in the federal budget over the next decade,” contends Robert McIntyre, the director of Citizens for Tax Justice.
“Clinton’s tax proposals, rather than digging our budget hole deeper, would raise a modest amount of new revenue through tax hikes targeted to corporations and the best-off Americans,” McIntyre says, arguing that hers is the more prudent path.
For his part, Tom Wheelwright, CEO of ProVision, a CPA firm, sees boldness rather than imprudence in Trump’s tax-cutting agenda, comparing it with Ronald Reagan’s. “While Trump may be fuzzy on many of his policies, when it comes to tax policy, his plan is the clearest, most business-friendly policy we have seen in many years,” he says.
But it’s also the most rhetorically contentious presidential campaign in years, and Trump’s heated words and frequent policy shifts may be injecting troublesome volatility into the capital markets, according to Paolo Pasquariello, an associate professor of finance at the University of Michigan’s Ross School of Business.
The “significant political uncertainty [the campaign] may be generating for U.S. and international financial markets,” he writes, “may ultimately haunt us all, since evidence from past elections suggests those implications are likely to be particularly severe this time around in light of Trump’s inflammatory words and proposed deeds.”