Wendy Glavin Agency
Due to the unpopularity of Wall Street, Trump and Clinton have questionable positions, as both have close ties to the financial industry.
In his January Iowa appearance, Trump boasted about his campaign’s independence from the financial sector, saying: “I don’t care about the Wall Street guys… I’m not taking any of their money.”
He criticizes Clinton for her finance industry ties. “Hillary will never reform Wall Street. She is owned by Wall Street!”
Despite his earlier comments, Wall Street has emerged as a top source of cash for the Trump campaign, donating at least $10 million in June to his joint fund with the Republican National Committee. That figure, however, still lags significantly behind the amount raised by Clinton. According to the nonpartisan Center for Responsive Politics, Clinton’s super PAC drew $36 million from Wall Street donors, about a third of its total fundraising.
Despite these contributions and ties, Clinton continues to attack Wall Street and supports a bill that would ban the practice of financial firms giving executives big bonuses as they leave to take a government position. Critics agree, the payments essentially keep them on the firm’s payroll while they’re making policy.
Another ongoing debate is asset managers receiving pay in the form of “carried interest” rather than as a salary or year-end bonus. This means their long-term income is taxed as capital gains, which faces a top rate of 23.8%, well below the top income tax rate of 39.6%—prompting critics to accuse asset managers of tax avoidance.
Both candidates agree that carried interest should be taxed as ordinary income.
Trump often states in speeches, “the hedge fund guys are getting away with murder” on their taxes. “They’re paying nothing, and it’s ridiculous,”Trump said in an interview on CBS’s Face the Nation. In his first major economic policy address in Detroit on Aug. 8, he declared: “we will eliminate the carried interest deduction and other special interest loopholes that have been so good for Wall Street investors, and people like me, but unfair to American workers.”
The candidates differ in one way on the hedge fund compensation debate. Hedge-fund managers could end up paying fewer taxes since Trump also wants to narrow the gap between capital gains and income taxes, slashing the top rate to 25%.
Both parties support auditing the Federal Reserve.
Trump has signaled support for a congressional Republican push to impose tighter oversight of the Fed, notably for the “audit the Fed” bill authored by former Republican presidential candidate Sen. Rand Paul of Kentucky that would open up the central bank’s policy-making to greater congressional scrutiny.
Clinton said in a campaign statement that common sense reforms like getting bankers off the boards of the regional Federal Reserve banks are long overdue. She argued that the board doesn’t adequately reflect the country’s demographics.
These issues will continue to dominate Wall Street’s scrutiny as we approach the November 8th election.