2017 is upon us and so is the new president. Last Friday, Donald Trump was inaugurated into the highest seat of office in the US.
Since Trump announced his intention to run for president, there has been much speculation about the efficacy of his proposed policies. Now that he’s inaugurated, Trump’s proposed policies may very well become law.
Trump’s policies focus on a wide array of issues; however, there are certain issues that have the potential to significantly affect my Canadian clients, particularly those clients who are in the middle of planning a permanent move to the US.
As such, I feel a personal responsibility to stay on top of these key issues, to follow their development and report back to my clients through a narrow, focused lens that explains how Trump’s policies will impact Canadians moving to the US.
This blog is the first of a series that will report on the issues most relevant to my clients.
These key issues are:
1) Cuts to Individual Tax RatesTrump plans to reduce individual tax rates in the US. The US’s low tax rates have always been a reason to move to the US, or at least a major sweetener for Canadians planning to move for other reasons. Current US tax rates, which are lower than Canada’s, already provide a savings for Canadians, but if Trump further reduces rates, savings will increase. I will follow this issue closely, as it also affects Americans or Green Card holders who are thinking of moving to Canada – changing tax rates are a consideration that might convince such people to stay in the US.
Overall, Trump has a restrictive view on immigration that’s focused on creating more jobs for Americans. Trump has threatened to renegotiate trade deals such as NAFTA, which can affect Canadians who are already working in the US under one of the NAFTA visas, like the TN, as well as those Canadians who are planning to move to the US by applying for these visas. If NAFTA gets thrown out or considerably overhauled, the TN visa may no longer be available. But from recent articles that I’ve read on this topic, it seems that Trump is more focused on renegotiating aspects of NAFTA that relate to Mexico rather than Canada.
3) Health Care
Repealing and replacing the Affordable Care Act, or Obamacare, is a hot-button issue that was a central promise in Trump’s campaign. On inauguration day, Trump took a major step toward fulfilling this promise, signing an executive order that significantly trims the health care act. The language in the order is quite general and somewhat vague, mandating that US government agencies ignore or massage parts of the act that they consider to be particularly expensive; the order doesn’t provide detailed directions regarding the exact portions of Obamacare that should be changed or repealed.
This issue is a major concern for my clients. A critical component of Obamacare is that it prevents insurance companies from refusing coverage to people based on pre-existing conditions, including age. Canadians moving to the US rely on private insurance for health care coverage, so if Trump’s order ultimately allows government agencies to repeal this aspect of the law, Canadians moving to the US will find it more difficult to obtain private health insurance.
There is lots of uncertainty about what will happen to this part of Obamacare.
In Trump’s 60 Minutes interview the day after the election, the president mentions that his government would keep the portion of Obamacare that prevents insurance companies from refusing coverage based on pre-existing conditions. Almost every article about this issue indicates that the prevailing goal of the US government is to ensure that coverage will be available to people regardless of age or pre-existing conditions, notwithstanding whatever happens to the rest of the Obamacare law. However, with the implementation of last week’s executive order, whether this portion of Obamacare will continue to be law remains to be seen.
As things evolve, I will keep providing updates on the above as well as other important issues that arise. If you’d like to be added to my mailing list so that you automatically receive future blogs in this series, please sign up here. In addition you may wish to register for our 2017 webinar series called, “The Trump Presidency – How is effects you as Canadians”.
Also, please feel free to contact me should you have questions regarding your specific situation.
MCA Cross Border Advisors, Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.