11/8/2020 0 Comments With Trump set to exit the Presidency, what does this mean for the UHNWI in America and the Superyacht industry?
Whatever the truth behind the allegations, and regardless of your moral opinion of Donald Trump, the fact remains that Trump´s policies were highly productive to the wealth of UHNWIs in America, and we clearly saw this translated into a healthy new build order book of Superyachts and a strong yacht charter market. American clients make up a very significant proportion of yacht owners and yacht charter clients, so what happens to the American markets significantly affects the Superyacht industry. How did Trump help the wealthy?
Hedge fund managers, private equity executives and venture capitalists benefit from the carried interest tax loophole and many other features worked together to give the very wealthy a four year boom in financial strength. What can we expect from a Biden government?Over the course of the election campaign, Joe Biden has been vocal that he commits to strong tax reforms if he gets into power, planning to make the tax system fairer by increasing taxes on the rich and corporations. This would include repealing most of the tax breaks from the 2017 TCJA, closing tax loopholes to the wealthy, and reforming taxation of capital gains e.g. for those making more than US$1 million, raising the top tax rate on gains from the sale of investments from 20% to 39.6% to match the top rate on wages and salaries. This of course would affect a significant proportion of our clients in the Superyacht industry, and I am already seeing this directly translating into potential business. A Superyacht law firm based in Florida recently commented that they have 2 clients sitting on new build contracts. Both clients have said that if Trump is re-elected it was all systems go, if Biden won then it would be on hold whilst they wait to see how financial reforms play out. However, it might not be as worrisome for the UHNWIs as they fear. Although the Democrats have won the White House, they fell short of regaining the Senate and this may prove positive for the markets, as a divided government reduces the risk of extreme policy changes, such as stricter regulation and higher taxes from the Democrats. Only time will tell what policy reforms the new Democratic government will be able to push through, but I predict that the UHNWIs do not need to worry at this stage. The Republican lead senate will do everything withing their power to protect the financial breaks afforded to the most wealthy. Predicted effect of a new Democratic government on the Superyacht Industry...I think we could well see a hesitation in new build contracts and yacht sales signed by American clients in the short term, pending the strength of Biden´s government to bring in new tax policies. If we were not in the middle of a global pandemic I would then predict that this hesitation would translate into a stronger yacht charter demand, but that of course will be dependent on what country and travel restrictions are in place this winter and next summer. As a charter broker the best advice I can give is to get away from it all, and there is no better place than aboard a yacht cruising beautiful waters, surrounded by your family and friends, safe from all the concerns of the outside world. No one says it better than the imitable Mark Twain “Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbour. Catch the trade winds in your sail. Explore. Dream. Discover”. To enquire of yacht charters for this winter or next summer email caroline.antlett@northropandjohnson.com
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