JD Vance wants to become vice president and many wealthy Americans may be behind him. Those who vote Republican in November will have a variety of reasons for doing so — including financial.
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Namely, many upper-class citizens believe a vote for the Trump/Vance ticket is the way to boost their bank accounts even higher. There’s no way to know exactly what will happen if this duo takes office, but financial gains for the wealthy could happen.
Vance’s stance on certain economic issues could offer a preview of what’s in store if he becomes vice president. Here’s a look at four ways the elite could see a financial gain from having the Ohio senator in the White House.
Also see what a Trump/Vance win could mean for the middle class.
Probable Renewal of the Tax Cuts and Jobs Act
“The Trump administration enacted the Tax Cuts and Jobs Act (TCJA) in 2017,” said Josh Radman, principal at Presidio Advisors. “This significantly increased the exemption threshold for alternative minimum tax (AMT), which can be particularly impactful for well-compensated tech employees with equity compensation — in particular, incentive stock options which are the most common form of equity grants.”
The AMT was instituted in 1969 to keep taxpayers from using tax breaks to avoid paying their fair share of taxes. It was introduced to target wealthy taxpayers who may have been paying little or no taxes under the standard U.S. tax system.
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Taxes for high-income individuals are calculated under the standard U.S. tax system and the AMT, requiring them to pay the greater of the two. However, the TCJA instituted a higher AMT, lowering the number of people impacted by it.
Specifically, the TCJA lowered the number of AMT payers from more than 5 million in 2017 to 200,000 in 2018, according to the Tax Policy Center. Vance of course was not involved with instituting the TCJA, but he could impact the future of this tax.
“What this means is that if Trump/Vance are reelected, there is a greater likelihood that the TCJA — which is set to expire at the end of 2025 — will be extended,” Radman said.
This of course could ensure the wealthy get to keep more money in their pockets.
“If TCJA is extended, the impact to tech professionals who exercise their incentive stock options will be that they have a much higher AMT exemption threshold,” Radman said, “and therefore it is likely that far fewer tech workers will need to pay alternative minimum tax.”
Possible Project 2025 Tax Cuts
Trump’s involvement in Project 2025 remains unclear, but the political initiative calls for a major tax reform. Specifically, it would shift tax rates to a two-tier system, consisting of a 15% tax rate for those earning up to approximately $168,000 and a 30% tax rate for those earning more than that.
Currently, single filers earning $200,000 to $500,000 are taxed at 35%, while those earning $500,000 or more are taxed at 37%.
“While Vance has distanced himself from Project 2025 so far, he could warm up to it after the election when his perspectives won’t cost him the election,” said Noah Damsky, CFA, principal at Marina Wealth Advisors. “If the proposed tax policy changes become a reality, lowering income tax rates, especially the top bracket to 30%, will be a big win for high earners.”
Promising Gains for Oil Industry Executives
“The oil industry would be one of the biggest winners,” Damsky said. “Vance has made it clear that he’s critical of the Inflation Reduction Act and electric vehicle subsidies.”
The Inflation Reduction Act (IRA) extended and expanded tax credits that help households invest in clean energy initiatives like solar panels and home energy efficiency. It also includes a clean vehicle credit, allowing individuals who buy a qualified electric vehicle to receive a tax credit of up to $7,500.
“[Vance] would be one of the biggest proponents of energy independence and domestic drilling,” Damsky said. “We could see the best environment for oil companies in 20 years.”
Of course, if oil companies do well, so will oil company executives.
For example, during the 2024 election cycle (as of Aug. 7), Syed Javaid Anwar, owner and president of Midland Energy, has donated $663,000 to the Republican National Committee, according to OpenSecrets. Jeffrey Hildebrand, executive chairman and founder of Hilcorp Energy company, has donated $413,000 to the RNC.
Potential Big Wins for Wall Street Bankers
“While Vance has a background in technology investing and venture capital, he’s been critical of big tech, such as calling to break up companies such as Alphabet,” Damsky said. “This could be an enormous tailwind for M&A [mergers and acquisitions] bankers on Wall Street, if hundreds of billions of dollars of spinoffs and IPOs are forced by the White House.”
A little background: Investment bankers working in mergers and acquisitions help clients sell their companies or buy companies. The median investment banker pay in the U.S. is $394,000 per year — including bonuses, commission, tips and profit sharing — according to Glassdoor.
Vance’s disdain for big tech is nothing new. In a 2021 Twitter post, he wrote “Establishment Republican apologies for our oligarchy should always come with the following disclaimer: ‘Big Tech pays my salary.'”
Continuing this sentiment, he shared his thoughts that “It’s time to break Google up” in a February 2024 X post.
Therefore, it doesn’t seem like a stretch to predict that his desire to upend big tech could become a reality if he becomes vice president.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: 4 Economic Policies of Trump’s VP Pick, JD Vance, That Could Help the Upper Class
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