Tech Eye on the U.S. Election

By Mark Mahaney
RBC Capital Markets, LLC
Published September 30, 2020 | 2 min read

With current polls suggesting Biden to be in the lead ahead of the 2020 U.S. Election, we explore the impact of a potential Biden administration on the U.S. technology sector. Leaving aside the issue of corporate tax rates – which would be higher under a Biden administration – the likely differences between a Trump and a Biden administration are relatively nuanced, with a few exceptions.

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There are six key issues to monitor under a potential change in administration:

 

1.Corporate Tax Rates

Biden’s proposed increase in corporate taxes rates to 28% (up from 21% currently) is the dramatic difference between the two candidates. This would have the most material negative impact on the tech sector of the six key issues outlined.  

 

2.Anti-Trust

With the Department of Justice and the Federal Trade Commission reportedly poised to file suits against both Alphabet and Facebook, and Biden’s relatively moderate public statements on Big Tech, a Biden administration might actually be modestly positive for the tech sector on this issue.

 

3.Research & Development Investments and Infrastructure

The Biden campaign’s statements on investing $300B in 5G, Artificial Intelligence and EV technology suggest that a Biden administration might have a comparably positive impact to innovate and introduce new products and services.

 

4.China Trade & Technology Issues

The Trump administration has clearly taken a much more aggressive approach to China on trade and technology issues (e.g. a potential ban on TikTok) than prior administrations. However, we suspect that this is reflective of a generational shift among U.S. policymakers and that a Biden administration would generally continue a similar approach.

 

5.Immigration

In terms of supporting the expansion of high-skilled visas, the Biden administration would appear clearly more favorable for the U.S. tech space when compared to the Trump administration. Biden states that he would increase the number of permanent, employment-based visas, which is currently capped at 140,000 each year, and promote mechanisms to temporarily reduce the number of visas during times of high unemployment.

 

6.Gig Economy Regulation

Biden has publicly praised AB5, the California legislation that essentially requires ride-sharing companies to provide full-time benefits to its contract employees. This could pose a challenge to the rideshare and food delivery industries.

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Mark Mahaney, Managing Director, Internet Research Analyst at RBC Capital Markets, authored the research report “Tech Eye on the Election” published on September 22, 2020. For more information, please contact your RBC sales representative.


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Mark Mahaney

Mark Mahaney
Managing Director, Internet Research Analyst
RBC Capital Markets, LLC


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