Investment bankers in the US have found an excellent opportunity to make some money out of election uncertainty. They are pushing Americans to sell their assets, scaring them with Joe Biden’s victory.
“We will help you sell your company now, or you will pay at least twice as much tax if Democratic presidential candidate Joe Biden achieves it,” is the slogan with which managers collect very profitable orders, Reuters writes.
The fact is that Biden plans to raise the tax rate on capital gains from 20% to 39.6% and the income tax rate from 21% to 28%. To do this, Biden needs to get the president’s seat, and the Democratic Party needs a majority in the Senate, while retaining control of the House of Representatives.
Against this background, managers contact the business owners and this strategy works. According to financial data provider Dealogic, sales of private American companies in the third quarter were a record 253 billion dollars, five times higher than in the second quarter of 2020 and 51% higher than in the third quarter of 2019. This is all in view of the fact that the pandemic has reduced the value of many companies.
“We encourage all our current and potential customers to take note of possible future changes, as they are considering an exit strategy for their business in the near future”, – says Houlihan Lokey Inc.
The offer was particularly interesting to the family who have owned the Asplundh Tree Expert tree trimming company since 1928. For a long time, the family refused to sell the business to investment companies. Now, however, the owners are working with managers to cash out some of their shares for fear of Biden coming to power.