Many plumbing distributors have been in business for more than 50 years — and they have always found opportunities to thrive regardless of Congress and presidential executive orders.

This year, COVID-19 has added challenges to the economy and markets. The incoming Biden administration will be laser focused on controlling the virus, distributing vaccines and providing economic bridges with additional stimulus.


We expect the Biden administration’s No. 1 goal will be to control COVID-19 and continue with Operation Warp Speed to deliver vaccines to the general population as quickly as possible. You can also expect additional lockdowns and struggles for small businesses during this period. To combat these economic struggles, the expectation is there will be multiple stimulus packages to prop the economy up. There will be a “whatever it takes attitude.” This should provide a bridge until the vaccines are distributed, but may cause long-term issues with government debt.


It is likely the Biden administration will push an infrastructure deal before the midterm elections in 2022. This could be a major boost to the economy if he can get it through the Senate. This has the potential to be advantageous for plumbing supply houses. Biden supports  $11 trillion in new federal spending over a decade. These programs may call for higher taxes on businesses and wealthy individuals.


To pay for these programs Biden has proposed the following tax plan:

  • Corporate tax rate to be raised from 21% to 28%;
  • Capital Gain taxes are expected to increase for higher earners reaching up to 43.4% (not including state capital gains);
  • The estate tax exemption would drop by about 50% (currently $11.18 million for singles and $22.36 million for married couples — $5.5 million for singles and $11.18 for married couples);
  • The top individual federal income tax rate would rise from 37% to the pre-Trump rate of 39.6%; and
  • Individuals earning $400,000 or more would pay additional payroll taxes.

Upcoming elections

In order to get much of this done through legislation, Democrats will need to win both seats in the Georgia runoff (held Jan. 5). If the Democrats were to lose either runoff election, the Republicans would hold the Senate. If the Democrats were to win both seats, there would be a 50-50 tie, with Vice President Harris as the deciding vote. I think the races are too close to call and the margins will be razor thin. Even in the event that the Democrats win the election, they have a Joe Manchin problem. He is a moderate Democrat who represents coal country in West Virginia.

Regardless of what occurs, it will be impossible for the Green New Deal to gain momentum through legislation. We are anticipating substantial energy reform to occur through executive order. Building momentum into 2022, it will be very important for Biden to control the House and the Senate. Thus, we believe Biden will want to do everything he can to keep the economy strong. From 2012-2016, the S&P 500 had an annualized return of 13.5% when Obama was at the helm, while Trump’s return was 15%.

There are many factors that go into stock market performance, but the presidency is only one aspect among many that plays into overall performance.I believe that free market capitalism always wins, no matter who is the leader of the free world. As the entrepreneurial spirit lives within the distributors that we speak with on a daily basis, I believe that opportunities will exist regardless of future legislation, executive orders or any changes to the tax code.