Will the Georgia Senate runoffs shape the future of the country?
Fox & Friend’s Weekend co-hosts Will Cain and Pete Hegseth discuss the Georgia Senate runoffs and the future of bitcoin.
If Democrats win both Senate runoffs in Georgia on Tuesday, securing control of the two chambers of Congress, it could trigger a 10% stock market sell-off.
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That's according to Oppenheimer chief investment strategist John Stoltzfus, who wrote in a note to clients on Monday that investors may be spooked by the prospect of increased corporate taxes and government spending under the Biden administration with a Democratic majority in the House and the Senate.
"A Democratic sweep of the two runoff elections in Georgia could cause the U.S. broad equity market to experience a downdraft of anywhere between 6% and 10%," Stolzfus wrote.
BIDEN'S TAX-THE-RICH AGENDA FACES SENATE ROADBLOCK IF GOP RETAINS MAJORITY
The closely watched Tuesday elections will determine whether Republicans retain control of the Senate — potentially limiting President-elect Joe Biden's ability to pass his multitrillion-dollar legislative agenda. If Democrats Jon Ossoff and Raphael Warnock win their respective races against incumbent Republican Sens. David Perdue and Kelly Loeffler, Democrats would secure a 50-50 split in the upper chamber, with Vice President-elect Kamala Harris then casting tie-breaking votes.
Biden has pledged to impose new taxes on corporations and wealthy individuals earning more than $400,000 annually, but he will almost certainly face a GOP roadblock if Osoff and Warnock lose on Tuesday.
BIDEN SAYS DEM VICTORIES IN GEORGIA SENATE RUNOFFS WOULD LEAD TO $2,000 STIMULUS CHECKS
Biden has repeatedly said he would roll back President Trump's 2017 Tax Cuts and Jobs Act and raise the corporate tax rate to 28% from 21%, restore the top individual tax rate to 39.6% from 37%, tax capital gains as ordinary income, cap deductions for high earners, expand the Earned Income Tax Credit for workers over the age of 65 and impose the Social Security payroll tax on wages above $400,000. Without a Democratic-controlled Senate, those tax hikes are likely off the table.
But should the runoffs end with a Democratic victory, the incoming president will have more leeway to implement his agenda, which includes higher income tax rates, an expansion of the payroll tax for Social Security, new tax credits and fewer deductions, as well as another round of massive government spending.
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"In our experience," Stolzfus wrote, "the markets prefer that Washington’s Capitol Hill have enough checks and balances in place to keep political power out of just one party’s hands."
Even if Ossoff and Warnock win both Georgia runoffs, however, Biden will still need to secure the support of every Senate Democrat in order for legislation to be passed. Ossoff denied on Tuesday that he would support Biden's agenda if it means Georgia families will pay more in taxes.
"I'm going to vote to cut taxes for working-class and middle-class families in Georgia and in fact, I spoke with President-elect Biden yesterday about how swiftly we're going to act to pass those $2,000 stimulus checks, which are currently being blocked by the United States Senate," Ossoff told FOX Business' Hillary Vaughn.
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