Apple, Amazon, Facebook, and Alphabet are preparing for an antitrust hearing in the U.S. Congress on Wednesday, but the real threat facing the tech firms comes not from lawmakers now, but from higher taxes later if Joe Biden prevails against President Trump in November, according to one analyst.
“A public flogging is likely” when chief executives Jeff Bezos, Tim Cook, Mark Zuckerberg and Sundar Pichai testify before House members who “unabashedly say they want to break up the industry,” AGF Investments Chief U.S. Policy Strategist Greg Valliere wrote in a note. Valliere doubts, however, that tech companies will in fact be forced to split up.
Instead, he said that an “aggressive new minimum tax that could be enacted within a year” presents a more immediate threat to the industry.
Valliere added that the four companies “contribute lavishly to political campaigns,” and have lobbyists who correctly point out that “this is perhaps the most successful and innovative industry in American history.” On the other hand, he called the low taxes paid by the tech giants — and by Wall Street firms — their “Achilles’ heel.”
MacDailyNews Take: It’ll be very interesting to see the breakdown of political donations out of Silicon Valley this cycle given the Trump vs. Biden positions on corporate taxes, payroll taxes, global trade, China, and antitrust, to name just a few salient issues.