It’s a Triple-T week in news, with Trump, tariffs and taxes bound to be headline grabbers. While it might be a week late to use this reference to Halloween, you have to hope the US election result doesn’t give birth to horror headlines!

When Donald Trump won in 2016, the market slumped initially before rebounding strongly. The Betfair Exchange election betting in London has tightened up significantly in the final few days, as a shock poll shows the Democrats potentially winning Iowa. However, Trump remains favourite, but odds have slid dramatically in recent days. Harris was nearly 2/1 early in the week but is now 6/5, which means either one could win, though Trump has the smallest of leads. So, Iowa will be a must-watch state on Wednesday our tine as the US election result unfolds.

Whatever happens, the Trump reaction to the results could be bad for stock markets, especially if he wants to contest the result. Either way, Trump’s plans for tariffs and taxes, as well as the Harris views on the same subject, will be big drivers of the stock market and the headlines that show up for the rest of the week.

Today, the AFR’s John Kehoe has focussed on the company tax impact of a Trump win. Experts as well as business groups argue that the former President’s promise to cut corporate taxes to 15% will put pressure on the Australian Government going forward to tweak our 30% company tax rate.

Why should we feel the heat of a Trump tax reduction? Well, as Kehoe points out: “Australia has the equal third-highest statutory corporate rate out of wealthy countries and is heavily dependent on corporate profits, according to the Organisation for Economic Co-operation and Development.”

Our small GST of 10% means we tax income (i.e. wages and profits) a lot harder than the US and other comparable first world economies. And because local companies can use franking credits to their advantage, while overseas rivals can’t, it makes investing in Australia less attractive.

This led Kehoe to explain that “dividend imputation, which provides franking credits for tax paid at the company level, makes the effective corporate rate lower for domestic shareholders but not for foreign owners”. And chief executive of the Business Council of Australia, Bran Black, revealed that CEOs had told him Australia’s high corporate tax rate was making it harder to attract investment.

So, there are push factors already in place that could make us think about lowering our company tax rate but with promises to reduce student debt and the budget blowing out into a big deficit this year and beyond, we’ll find it hard to lower the company tax rate if Trump gets to put his size 12s under the desk at the White House again.

Interestingly, the potential tax hit for Australia is not just dependent on whether Donald Trump or Kamala Harris wins this globally important poll because the threat becomes more real if either candidate not only wins but also takes the Senate and the House of Reps. That would spook the stock market as it means big tax changes could result from whatever President wins. Then there’s the matter of the Trump tariffs that could be a 10% or 20% slug on all imports from anywhere and a 60% smashing for Chinese exports into the US.

This would result in higher inflation worldwide and that would KO talk of substantial interest rate cuts and could have the RBA contemplating rate rises!

Yep, this US election could easily create Halloween headlines that scare world economies and stock markets. This is why the media is watching these results as one of the biggest news stories of the 21^st century.

Whoever you’re rooting for, hope you don’t win too well because any US President controlling both the Senate and the House could be a huge threat to economies, stock markets and geo-political peace right around the planet!