A recent New York Times report says that President Donald Trump's taxes show 'years of tax avoidance.' Stefanie Miller, FiscalNote Markets Managing Director, joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss the implications of the recent New York Times report and what it could mean for the 2020 presidential election.
ALEXIS CHRISTOFOROUS: A "New York Times" investigation over the weekend of Trump's finances shows he paid no taxes in 11 of the 18 years between 2000 and 2017. And in both 2016 and 2017, he paid just $750 in taxes. President Trump calls the report "fake news."
Stefanie Miller is Managing Director at FiscalNote Markets, and she joins us now. Stefanie, good morning, and good to have you here. So look, the media and pundits are calling this a bombshell report. But if you remember back to the 2016 presidential debate, before he became president, Trump telegraphed his tax avoidance. He said, quote, "I take advantage of the laws of the nation." So is this really a bombshell report that can move the needle for voters?
STEFANIE MILLER: I think a lot of folks are having this exact debate right now. There's a lot of news that has come out. Other news that dropped bombshell-style news in 2016 was that "Access Hollywood" tape. There is a lot of bad news about President Trump. And yet he continues to be popular among a group of people.
So it is-- I think the jury's still out how much this is gonna matter. What he's doing right now, though, is trying to demonstrate value to likely voters and gettable voters. And he's doing that through this Supreme Court justice nomination process. So I think he's gonna continue to focus on his track record. And his naysayers are gonna continue to focus on the bad press. And it's kind of up to voters, then, to really react.
BRIAN SOZZI: Stefanie, should this concern executives at publicly-traded companies? You look at multinationals across the board, so many examples of lots of companies paying next to no taxes to boost their bottom line.
STEFANIE MILLER: Yeah, that is not a sustainable framework to do business in the US if Democrats win. That's going to be, in my view, one of the very first thing that Democrats turn to is this idea of rich people, rich corporations, that the rich have figured out all these ways not to owe anything, while the working class and the common person are paying a huge proportion of their income to taxes and how unfair that that feels to Democrats.
So if Biden wins, if the Senate flips to Democratic control, which currently actually is my thinking of where this could be headed, I think one of the very first things we see is tax policy to start trying to, quote, unquote, "level this playing field."
ALEXIS CHRISTOFOROUS: So right now, we've got Biden leading Trump by eight percentage points nationwide in the latest poll. It's a "New York Times"/Siena College poll. Do you think this tax story widens that lead at all for Biden?
STEFANIE MILLER: I think of it more like there's going to be a tightening no matter what in the days leading up to November 3. And what's interesting now is-- I know we've talked about, Alexis, specifically, like, we're not having an election day this year, we're having a whole election season. So some of the voting is already happening, which means some of the trends that are happening right now are impacting the outcome.
The national polls are one thing. The state polls are something else. I think for Biden right now, who's leading in many important states, every Upper Midwest state seems like it's gettable for him, most of which went to Trump in 2016. What he wants to do is hold onto that lead. So I think that tax news or other bombshells that hurt Trump help Biden maintain a lead rather than necessarily making more of a lead. Because the overwhelming forces are going to push the too much closer as election day draws closer.
BRIAN SOZZI: Somewhat remarkable, Stefanie, is that in a lot of polls, President Trump still leads on how he is handling the economy, despite the fact we're in a bruising recession, we continue to be in one. Does that look to you that might come off the high, as we have another jobs report coming this week, and there are signs across the board that the recovery from the pandemic has stalled?
STEFANIE MILLER: I think it's gonna be hard to knock Trump down on that one. I think pre-pandemic, economic numbers for most people looked really good. Not just the folks that watch this show and are watching the markets, but even folks in small towns and these Upper Midwest states.
We're finally seeing money flow to them that was incrementally, like, very useful. And they really looked to Trump as helping their bottom-line household economic situation. So I think that he gets to have that track record. And he is viewed and will continue to be viewed as more likely to be a better person to help fix the economy going forward.
ALEXIS CHRISTOFOROUS: So tomorrow night, first presidential debate in this cycle, the first of three. What are you looking for specifically, Stefanie? And what should investors be listening for in that debate?
STEFANIE MILLER: Yeah, so I think most of the things they're gonna talk about-- and the list is out. So they're gonna talk about their track records, the SCOTUS-- Supreme Court seat. They're gonna talk about the pandemic, the economy, election integrity. I think we know, for the most part, how each candidate's gonna speak.
So what I'm really looking for are two things. One is, what do they do when they talk about China and trade, to the extent they talk about it? Because Trump has an ability right now to really pressure Biden to come out very forcefully against China, which will lock him in in the early days of his presidency to continue the Trump era China trade tactics which investors care deeply about. Whereas if the other topics are so noisy, and they don't end up talking too much about China and trade, it could give Biden more flexibility.
The second thing I'm watching for is whether Biden endorses, either at tomorrow's debate or at another of the other two future debates, if he endorses removing the legislative filibuster, which totally changes how the Senate operates. If you remove that, then you only need a simple majority of 51 votes to pass any policy going forward.
So it would really change how policymaking is done in the US. Every two to four years, we could see huge swings in policy if that is changed. And so if Biden endorses that, and the Senate Democrats are already endorsing that, that could be a huge sign that that's actually happening in early 2021 if they win.
ALEXIS CHRISTOFOROUS: All right. We're all gonna be watching. Stefanie Miller, Managing Director at FiscalNote Markets, good to see you this morning.