Moody's Analytics: A Joe Biden presidency would create 7 million more jobs than Trump's
Moody's Analytics, an economic research firm, said in a report at the end of September that a Joe Biden presidency would create seven million more American jobs than a Donald Trump presidency.
Real after-tax household income would rise on average by more than $4,200 during a Biden term and a Democratic sweep. With Trump in office, yearly household income would be expected to rise less than $1,000 per household.
Economics expert Michael Linden said via Business Insider that "the Moody's analysis tells us the Biden plan would result in more jobs, a stronger economy, and higher incomes for the middle class."
On the surface, we have heard everyone tell us that a Biden win would be better for the economy. But why is that? What is in his actual plan that will create a better economy for America and, most importantly, the middle class. We will take a look using Moody's research.
Joe Biden's tax plan
Republicans have been hounding Joe Biden saying he will raise everyone's taxes. However, that is not the case. Biden is only planning on raising taxes on people that make more than $400,000 per year. His tax plan would heavily tax the top one percent and the rest of America would hardly see a difference.
As you can see, the hardest hit group of people, by a lot, will be the top one percent in the country under a Biden presidency.
Now let's look at how that changes under a Trump win.
Everyone would be paying less taxes, however, the richest five percent of the country would actually see the largest increase in after-tax income, meaning their taxes got lower relative to other Americans.
A Biden win would mean greater wealth redistribution. The richest Americans would have to pay their fair share and that would provide a lot of money to create new middle-class jobs in the renewable energy sector in addition to providing a better safety-net for Americans.
Biden would tax corporations far more than Trump
Over the next four years, Biden's current corporate tax plan would create $840 billion more in revenue for the government compared to the current tax plan in place.
Trump, on the other hand, would implement more tax cuts and the government would actually see $21 billion less in corporate-tax revenue than the current plan in place. That means less money for Americans and more money for corporations.
What is Biden going to spend the money on?
Here we will look at how a Biden presidency would spend its money compared to a Trump presidency over the next 10 years. There are four main buckets the government spends money on: healthcare, infrastructure, social safety net and education.
Compared to the current policy in place, a Biden administration would plan to spend:
$2.4 trillion more on infrastructure
$1.9 trillion more on education
$1.5 trillion more on the social safety net
$1.5 trillion more on health care
Compared to the current policy in place, a Trump administration would plan to spend:
$1.1 trillion more on infrastructure
$400 billion less on education
$500 billion less on the social safety net
$900 billion less on health care
"You have to spend money to make money."
That idea is true for the United States economy as well. You can't expect something to do well overtime if you don't invest in it. Biden's plan would involve investing more in America's future than Trump's plan.
Why does that extra spending mean a better economy for everyone?
There is a huge distinction from the economy and the stock market. And I will make sure to hit on both.
Moody's predicts that the SP500, a collection of the 500 largest American companies, would be much higher under Biden than Trump.
In a Democratic sweep, the SP500 is predicted to be at 3,516 points after four years. Under current policy and a Trump administration, the stock market is expected to be at 3,301 points by the end of a possible second Trump term.
The SP500, as of Friday, stands at 3,477 points. A Biden win would mean that the stock market would be expected to go up over the next four years while it would be expected to drop under a Trump presidency.
The other economy, that is not the stock market, is main street. That consists of having more Americans employed and earning better wages. It has nothing to do with the stock market.
Under Biden, after-tax household income will be greater by more than $4,200 and seven million more Americans would have jobs.
Biden would also continuously raise the minimum wage. Trump would fight for deregulation (for the benefit of big business) and it would be extremely unlikely for the minimum wage to rise at all.
A Biden economic policy would be better for everyone. The stock market would continue to rise, Americans will have more jobs, will make more money, and the top one percent and corporations will pay more taxes.
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About Ryan Lipton:
Ryan is a student at the University of North Carolina at Chapel Hill majoring in Business Journalism. He has written in the past for SB Nation's Silver and Black Pride, USA Today Sports Media Group, North Carolina Business News Wire, the Daily Tar Heel, and has worked with Ice Cube's BIG3 basketball league.