Summary
- After twists and turns in the political landscape over the last several months, the outcome of the presidential race is now highly uncertain.
- Seven key battleground states —Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin—will likely determine the election outcome.
- Neither party wants to see everyone’s taxes go up when the Tax Cuts and Jobs Act expires in 2025.
When the investment team at TIAA Wealth Management needs insights into Washington politics, they turn to Chris Spence, TIAA’s managing director for federal government relations.
Niladri “Neel” Mukherjee, TIAA Wealth Management’s chief investment officer, recently invited Spence to join him on a client webinar discussing the 2024 elections. TIAA clients can watch a full recording of the October 14 conversation hereOpens in a new window.
Highlights are below, edited for length and clarity:
MUKHERJEE: Chris, can you talk about how much the political landscape has changed since the last time we held one of these chats?
SPENCE: We’ve seen so many twists and turns since I last spoke to this group in March. Back then I said [President Joe] Biden will not drop out of this race. And even if he did, I didn’t think Vice President [Kamala] Harris would do very well.
I was proven wrong on both counts. Biden dropping out changed the trajectory of the race. Vice President Harris hit the ground running. That became evident initially in the fundraising. She brought in a lot of money very quickly, but then it started to become clear that she was hitting the ground running in the polls too. Prior to Harris becoming the candidate, Trump was leading in national polls, and he was leading in all the battleground states. She closed a lot of those gaps, and she’s now leading slightly in national polls. It’s very close.
MUKHERJEE: Based on the electoral college map you’ve shared, it appears the race comes down to several toss-up states. Correct?
SPENCE: Don’t worry about national polls. Pay attention to those seven states—Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin.
Assuming Harris wins all the states considered likely or safe Democratic states, that gets her to 224 electoral votes. She then needs 46 more. Her easiest path is winning Wisconsin, Michigan and Pennsylvania. Those three would get her to exactly 270 electoral votes, and she will have clinched. Biden won all three of those states in 2020.
Assuming all the likely or safe Republican states go to Trump, he still needs 51 more votes. His path is a little bit more challenging than hers. He's counting on Georgia, Arizona, Nevada and North Carolina, and Biden won all but North Carolina in 2020. Even if Trump does win all four of those states, that only gets him to 268. He’s still two electoral votes shy. If this is his path, he's obviously going to have to win one of the three states Harris is focused on.
MUKHERJEE: Many clients want to know what the election results would mean for their taxes.
SPENCE: The big issue is the expiration of the Tax Cuts and Jobs Act (TJCA), which is set to sunset in 2025. You would see the return of the lower standard deduction. Individual tax rates will go back up to 2017 levels. The estate tax exemption would be cut in half.
I would say the Republicans would love to just extend the entire thing. But it’s in both parties’ best interest to address this since the expiration of TCJA will translate into a tax increase on all Americans. Even though Democrats rallied against it when it was enacted, they're not going to want to see taxes go up on certain folks. The Biden-Harris budget proposal that came out earlier this year proposes that anybody who makes $400,000 or less would not see a tax increase.