Biden’s impact on the technology sector – rising taxes and increased regulation – The Average Joe
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    Biden’s impact on the technology sector – rising taxes and increased regulation


    November 17, 2020

    What does Biden mean for all those tech stocks investors love hoarding? Bad news first…

    • Increase taxes on tech companies, who already pay fewer taxes on their income generated outside the US. Biden’s plans are to double the tax rate on the income these companies make internationally to 21%.
    • Changes to Section 230, a law that protects platforms like Facebook from being sued for user-posted content. Biden had previously called for the law to be revoked or removed — bad news for social media companies.

    Big tech in Biden’s crosshairs

    Big tech companies like Google, Facebook, Amazon and Apple have been the target of anti-trust lawsuits from the US government and it’s unlikely it’ll stop with Biden.

    The incoming president is open to breaking up and regulating big technology companies but hasn’t publicly endorsed it yet.

    The tech giant that’s likely to benefit from Biden — Apple, whose profit margins have been negatively impacted by Trump’s tariffs between China and the US. It’s unlikely that Biden will continue a trade war with China.

    (Learn more: Why was Google sued by the US government and what’s the impact on its stock?)

    For investors…. It depends which side of tech you’re on

    But it’s not all bad for tech — Biden’s plans will benefit different parts of the tech sector:

    • Proposed $300b budget for research & development in technologies like electric vehicles, 5G and artificial intelligence.
    • Promised to reform the H1-B visa system, which had restricted tech companies from hiring engineers and developers from abroad.
    • A friendlier relationship with China could benefit chipmakers like Nvidia and AMD, who rely on Chinese manufacturing and are waiting for Chinese approval of their acquisitions (learn more).

    If Republicans take control of the Senate, it could be difficult for Biden to implement his plans for big tech.

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