Perhaps it was a head fake? Recently, it was reported that the Democrat Party was attempting to repair the bridges destroyed by the Biden Administration regarding digital asset innovation and the entrepreneurs in this industry. President Joe Biden has been determinably anti-crypto, thus driving this sector of Fintech into the arms of former President Donald Trump with multiple big names in tech announcing their support for the former President.
The GOP Platform, which was revealed last month, included the statement:
“Republicans will end Democrats’ unlawful and unAmerican Crypto crackdown and oppose the creation of a Central Bank Digital Currency. We will defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their Digital Assets, and transact free from Government Surveillance and Control.”
The Democrat Platform, which has been widely distributed, has zero mentions of digital asset innovation and no comment on Central Bank Digital Currency (CBDC) or blockchain technology.
The Democratic Platform is heavy on changes to the tax system, though. It states the intent to tax capital gains as regular income, a move that will harm the start-up/early-stage ecosystem – not to mention investors in general.
Democrats want to raise corporate rates to 28% from the current 21%. During the Trump Administration, corporate tax reform was pursued because US corporate taxes were at the high end of all OECD countries. The lower rate of 21% puts it squarely in the middle, thus boosting the competitiveness of the US economy. At 35%, the US was competing with Colombia and Malta to have the highest corporate rates in the world. At 28%, the US would be far higher than the OECD average in 2023, around 21.1%.
The Democrat Platform appears to lack understanding of inflation. The Platform states, “[corporate] costs have come down, but they’ve kept prices high anyway, boosting profits.” In reality, prices continue to rise, but the speed of price increases has slowed.
The Democratic Platform also doubles down on the initiative to establish a Global Minimum Tax agreement—a concept that has been idiotic from its inception and viable only in tax fantasy land. Anyone with an iota of understanding of taxes, subsidies, and economic policies of competing economies knows this is dead on arrival.
Democrats indicate they will create a special tax to target billionaires to pay a minimum income tax rate of 25% of something. Sure, some will pay, but others will move their wealth elsewhere – somewhat similar to the exodus of the wealthy from the high-tax state of California to jurisdictions that are more business and consumer-friendly.
The Democrat Platform does comment on supporting Artificial Intelligence, stating:
“Artificial intelligence (AI) holds extraordinary potential for both promise and peril. While AI is helping to cure diseases, predict the weather, and transform education, it’s also being used to clone voices, commit fraud, institutionalize bias, and undermine democracy.”
And;
“Democrats are finding solutions to make sure that as AI’s capabilities grow, we can manage the implications for Americans’ rights, safety and security.”
It also touts the Biden Administration’s Executive Order directing federal agencies to establish standards for AI safety and security.
As for the GOP Platform on AI, it simply states:
“We will repeal Joe Biden’s dangerous Executive Order that hinders AI Innovation, and imposes Radical Leftwing ideas on the development of this technology. In its place, Republicans support AI Development rooted in Free Speech and Human Flourishing.”
The Democratic convention is this week, ending with a speech by Vice President Harris, so we may be able to glean more about the party’s policy direction if they win the race. Still, as it stands now, I wouldn’t hold your breath for much support for Fintech and digital assets.
