Majority of C-Suite Leaders Believe Corporate Tax Rates Will Rise & Trade Tensions Will Rise Regardless of Election Outcome, According to New PwC Survey

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Tuesday, September 15, 2020 -- PwC conducted a survey of 578 chief financial officers (CFOs) and other executives to determine the general election’s impact on the business environment. According to the results of PwC’s Road to Election 2020 Pulse Survey, if there is a Biden administration, more executives are likely to increase efforts around tax planning in anticipation of changes to US corporate tax and other tax policies. If there is a second term of the Trump White House, more executives are likely to increase investments in supply chains, given US-China trade tensions. However, regardless of which party controls Congress or the White House, 70% believe that business tax rates will rise to pay for COVID-19 relief and 63% agree that trade restrictions between the US and China will continue.

According to the survey, executives believe that some type of fiscal COVID-19-related policy support is needed both for the US economy (95%) and also for their businesses (78%). While revenue forecasts have improved over the past few months as companies have adapted to operating in a COVID-19 environment, more than half of all respondents (56%) still expect their company’s revenue and/or profits to decrease over the next 12 months as a result of the pandemic. However, on balance, 28% of CFOs and other C-suite leaders expect an increase in revenue over the same period.

As we get closer to the general election, business leaders want the federal government to take action to help improve the current business environment. Specifically, a majority of respondents said that a federal strategy to combat the pandemic is needed to boost consumer confidence (82%) and increase domestic production of essential goods (81%).

“There is resounding support among the C-suite for more from Washington to help boost the economy and improve the business environment under COVID-19” said Tim Ryan, PwC US Senior Partner and Chair. “But business leaders also recognize that they have to focus on what they can control. As they look toward the November election, they are scenario planning in order to emerge stronger from any policy shifts that may affect their bottom line.”

Key Survey Results:

Top Findings:

  • C-suite leaders acknowledge that investments are crucial to competitiveness in 2021 as they  work to factor in responsiveness to policy shifts.
    • More executives are likely to increase investments in tax scenario planning in the event of a new administration (57% for new administration vs. 43% for current administration).
    • In the event of a second term of the current administration, more executives say investments in their supply chains will increase (45% for current administration vs. 37% for new administration).

Regardless of the outcome of US elections:

  • 70% agree that business tax rates will rise to pay for COVID-19 relief, regardless of the outcome of the election, with 35% in “strong agreement”
  • 63% agree that trade restrictions between the US and China will increase, regardless of the outcome of the election, 28% “strongly agree”

A desire for further federal support:

  • 95% of executives say some type of policy action is needed for the US economy to help recover from the economic effects of the pandemic
    • 20% say their own business needs no further fiscal policy support
    • 81% agree that the federal government should implement a strategy to boost domestic production of essential goods to help the US economy; 46% “strongly agree” 

About the survey:

PwC Road to Election 2020 Survey

PwC fielded a study among 578 C-Suite and other executives to understand current levels of concern with and anticipated impacts of the 2020 US election and the continuing coronavirus outbreak (COVID-19). This survey fielded from August 28 to September 3, 2020, among executives, including 272 chief financial officers, 90 chief operating officers, 75 chief human resource officers, 77 chief risk officers/chief audit executives/chief information security officers, and 64 tax leaders. 68% of respondents are from Fortune 1000 companies. This report captures responses across all survey questions: www.pwc.com/us/election2020

About PwC

At PwC, our purpose is to build trust in society and solve important problems. PwC is a network of firms in 157 countries with more than 276,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

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Molly Molendyke

Molly Molendyke

CEO Survey, Chairman Communications, US Executive Leadership Communications, PwC US

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