Carefully and pay a lot of attention to precedent. That is something professor barrett focused on a lot in her scholarship. She cares deeply about precedent and about the institution of the courts. I dont think she would be inclined to move the law very fast . Me a very david in some of the writings i have gotten a chance to look at, she has some skepticism about majority rule. She thinks when Congress Passes look at ithould because if it interferes potentially with individual rights. Tara that is right, but that in and of itself is a very commonly held view by a lot of individuals. Depending on who we are, we care about different rates, let all of us would like a federal judiciary to protect our individual rights from interference. Which things should be left to the political process. This apply to statutory rights as well as Constitutional Rights . We have the bill of rights to protect us. But when it comes to the statute that the congress has passed . Tara i think many members of the Supreme Court right now, and i think a Justice Barrett would fall under that category, care about the Words Congress has passed. They adopt a textualist interpretation of the federal statute. Athink Justice Barrett, Justice Barrett would adhere to the text of the statute. That means that if done properly, a textualist will read a civil rights statute broadly. We can look back at Justice Gorsuch tragic opinion in the title vii case that involved whether title vii protected the lgbtq community. Justice gorsuch, to the surprise of many, said, yes, it does. The text of the statute for tax against discrimination because of a persons sex. He said that means it protects people who are discriminated wasnst, because of man discriminated against because he is romantically attracted to men, or a person who is discriminated against because she transitioned from male to female, that is covered by sex discrimination. And this was not a decision that was divided along political lines by democratic appointees and republican appointees. I dont purport to know what judge barrett would say about that particular statute if she were on the Supreme Court, but it suggests that textualism does reachad a justice to necessarily conservative or necessarily progressive outcomes . David which i think leads us to her taking issue fair to say, with chief Justice Roberts in the Affordable Care act case. That is a subject of a lot of discussion right now in this hearing. It tends to be that senators think that she is against or for the effort will care act. I understand the issue she had with chief Justice Roberts was not for or against, it was what the statute said. Right. The Supreme Court in this case involving the Affordable Care act from 2012, the court said the individual mandate could not be justified under the commerce power but could be poweried under the taxing because it effectively it was attacked for individuals who chose not to buy insurance. What a number of commentators pointed out, including judge barrett, is that the statute itself didnt say the words tax. The statute said the words penalty. So it was a matter of textual interpretation. It is a stretch to call it a tax. There are reasons one can do that. Supreme Court Justices often try to interpret statutes so as to find them constitutional, and chief Justice Roberts was invoking what we call a canon of constitutional avoidance. But on the pure text of the statute, it was a stretch and i think many commentators, both who support the Affordable Care act and those who oppose it, sai recognized it was a stretch on the statutory reading . David bringing that forward to the here and now if judge barrett becomes Justice Barrett one of the cases she will sit on is the Affordable Care act something the senators are saying maybe you should recuse yourself. At the same time, the issue of the tax penalty has been decided. Do we have any sense on how she might will on that . Tara we do not have a sense. There are several issues that could come before the Supreme Court. One is whether the plaintiffs have the right to sue at all once there was no longer a tax for them to pay in the 2017 statute. Commerce zero out the tax and said you can either Purchase Health insurance or pay zero. So the question is can someone sue about that if you dont any longer have to pay the tax. The other question is constitutional power of the individual mandate now that there is no longer a tax. Even though there is no constitutional power for the mandate, the question you noted his separability. That involves when the Supreme Court strikes down a version of the statute, then that means the rest of the statute has to fall. I think there are significant hurdles for the challengers on all three of these potential claims. I think the biggest hurdle of all is the separability claim. The justices will be disinclined, i think, not just a Justice Barrett but others on the court right now, will be disinclined to say that if one version of the Affordable Care act goes down, the entire hundreds of pages of statutes have to go down as well . David finally, professor putting aside how Justice Barrett might rule in any individual case as you look at it do you think her sitting on the Supreme Court might shift the way the Supreme Court rules. The way, for example, Justice Scalia shifted the direction of the court with regard to them . Lism and original is tara i think you are right about Justice Scalia the court to a focus on statutory text. I think this was the single most important aspect of Justice Scalias jurisprudence even though people focus on his approach to the constitution, his originalist approach to constitutional interpretation. I think the biggest change his mate was getting the rest of the court, and the rest of the judges of the lower federal court to focus on the text. The big question after he passed away is whether that would go away, the focus on statutory text. I think judge barrett, previously professor barrett, is very dedicated to textualism and they think her presence on the court will very much encourage the rest of the justices to focus on the text of statutes. I think it will also make the court pay even more attention to history when interpreting the constitution. But i think that would happen anyway. That change has already occurred in the court. She will really focus on the text if she is confirmed to the Supreme Court . David professor, i appreciate you being back with us. Tara leigh grove is professor of law at the university of alabama. You can catch more of the barrett confirmation hearings on the bloomberg at liv. Next, tax planning for a possible Biden Administration. This is balance of power on Bloomberg Television and bloomberg radio. Balance ofis power on Bloomberg Television and radio, i am david westin. Senators are questioning Supreme Court nominee Amy Coney Barrett again today. She dodged questions from democrats about how she would issues. Particular judge barrett also said she hasnt made any promises to anyone about how she would decide any case. One of those asking questions will be democratic Vice President ial nominee kamala harris. Members of antigovernment groups accused of plotting to kidnap michigans governor, Gretchen Whitmer also discussed kidnapping Virginia Governor ralph northam. The fbi testified in a hearing today that the groups were on unhappy with the looked on orders of the governors issued to contain the coronavirus pandemic. Six men have been charged. Seven others face state terrorism charges. Governments across europe are ratcheting up restrictions in an attempt to contain the virus. The World Health Organization says there were more than 700,000 new covid19 cases reported in europe last week, a jump of 34 compared to the previous week. Soccer star Cristiano Ronaldo has tested positive for the virus. Ronaldo will not be allowed to play for portugals team in a match against sweden tomorrow. The countrys Soccer Federation says he has no symptoms and is in isolation. Global news, 24 hours a day, on air and quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Mark Crumpton. This is bloomberg. David . David thank you so much, mark. President ial candidate joe biden has made no secret of his plans to raise taxes on the wealthy if a, using them to pay for his programs causing some americans to look at their tax planning ahead of the election. Joining us is jere doyle, bny seniorwealth management Vice President. Talk about why americans would want to rush through their lawyer right now to figure what they need to do. Jere one of the problems is currently there is a very large exemption in the United States. You have the ability to give away, during a lifetime, without having to pay transfer tax or million. Up to 11. 5 that 11. 5 million exemption is scheduled under current law to revert in the year 2026 to 5 inflation. Exed for the problem is that if the democrats hit the trifecta in november, there is a fear that what will happen is that exemption that is currently 11. 58 million will be reduced to as low as 3. 5 million, and possibly as 1 million for gift tax purposes. We are turning clients to look at this now. Go to your attorney and perhaps what you want to do is make some transfers to use this large 11. 58 million exemption, all or it, before they take it away, because there could be a situation after the november elections where if you dont use the exemption, you will lose the exemption . David first of all, they would have to pass a law to do this, and it would have to be after the first of the year if Vice President biden becomes president. So you have until the end of the year. But if you make a large transfer to your sons or daughters, and you are under the exemption, then you are good to matter how they changed the law . Jere that is correct, even if the exemption goes down and you millionwhole 11. 5 8 exemption, if they change the law and the exemption goes down, they told us in the regulations enacted in november of last year that they will not clawback the exemption. If you use it, you are good. You will not run into a situation where they will taxi on the difference between what the previous exemption is and now . It is david we hear about the wealthy having various trust arrangements that they can enter into, generationskipping that. , things like would those be affected by a Biden Administration if it changes the law . Jere it probably would. There might be a potential change in the amount you can give to those trusts if they reduce exemptions. There has also been talk of dynasty trusts, those are designed to transfer assets into the trust that the trust can last multiple generations, in some cases, in perpetuity depending on the state you set them up in. There have been indications that some of the things they might do is limit the duration of those trusts to 50 or 90 years so they cant last in perpetuity. That would bring those assets back into the transfer tax system . David as i understand, if you die and you give assets to your in those assets gets stepped up to the value of when you died . Jere what happens under the stepped up basis regime is, say i have stock i bought are 10 a share and is currently worth 50 a share, if i were to die, the cost basis for income taxes purposes would be increased to 50 a share, meaning the gain never gets taxed. What biden would like to do and the democrats would like to do is eliminate step up in basis. So in my example, if i died with the stock butterball i bought for 10 that was currently worth 50 a share at the time of my death my heirs would not only inherit the stock, they would get the embedded gain. The cost basis when they received the stock would be 10. Share versus 50 a share that is called carryover basis. We had that in 1976. It proved to be unworkable and it was repealed retroactively in 1980. So we have dealt with this before. And it didnt work out that well . David the polls you cant always believe them but they seem to be pointing in the direction that it is possible that joe biden could get elected november 3, and it is even possible that the senate could switch over to republican, which would be important for this purpose. Are you seeing people lined up outside your door, or around the door of trust and estate Tax Accountants and lawyers in this country . Jere we are trying to let people know about potential changes and things they might want to do such as use exceptions now and set up trust now. We had the experience in 2012 where they were going to change in exemption. A lot of people waited till the last minute and as a result of a found that attorneys were too busy to handle their work for them. Appraisers were too busy to do appraisals for difficult to value assets. Now. Tell clients, plan you dont have to pull the trigger and actually transfer the assets, but you have at least have the documents in maybe you have an appraisal in place that way if you want to pull the trigger if the law changes, you can do it at a moments notice . David the reason why the former Vice President proposed this is not to be nasty to rich people, as far as i can understand, he wants the money for programs to invest in, in things like infrastructure spending, things that we agree should be done. Do you think enough wealthy thiscans will try to get fixed so he will not get the revenues he would like to get out of it . Has substantial could this be, the tax structuring . That he wants to use the money for health care, infrastructure and even to battle climate change. You are finding that there is a potential that the large source of revenue, measured over a tenyear period, to cover the costs for some of these programs. Hopefully, our clients will engage in some type of planning before the changes have. Tell aproactively deposit take advantage of these changes before they happened so they can save some of their estate and pass it down to their heirs . David jere doyle, senior Vice President of bni mahlon wort wealth management. Coming up, we speak to Richard Haass for his thoughts on how the pandemic has changed Foreign Policy and much more. This is balance of power on Bloomberg Television and bloomberg radio. The david this is balance of power on Bloomberg Television and bloomberg radio. I am david westin. Time for a check of the markets with scarlet fu. Banking numbers are out. But on the other hand not encouraging news about the vaccine. Scarlet david, investors are dialing down the risk appetite. In the markets are taking a breather after the s p 500 want to a sixweek high. Tech is extending its outperformance once again, a bit of a sign of the bid for safety. But turned to safety is reflected across asset classes, equities. N we are seeing u. S. Treasuries move higher as the market returns from a long weekend. The dollar is also former as well. And there has been no movement on stimulus discussions. Pimco writes that can perhaps of stimulus looks very likely dead until january. And the macro picture remains challenged. The latest data shows inflation remains tame despite the feds. Best efforts to push prices higher. And the imf says the global recession will be lower than forecast. So in this new normal, you look at what sectors are outperforming and underperforming, the worst three performers are all cruiseship operators in the s p 500. One of them is trying to raise a billion dollars in bonds. That will dilute existing shareholders. This is crews ships in the u. S. Remain docked. Delta is leading airlines lower after thirdquarter results is appointed, also delaying 5 billion in jet deliveries. Wise splash out on increasing supply when demand is still pretty low . David not good for cruise lines. What about banks . We started with j. P. Morgan and citi both surprising with the upside. Looks like they are doing pretty well scarlet they were doing well operationally. People were expecting they were provisioning for bad loans but they were very aggressive in the first half of the year. They set aside money to cover loans that could go bad. What we saw this time around is provisioning slowing down. J. P. Morgan and citigroup set up a combined less than 3 billion. An analyst from Academy Securities says financials have been conservative in their reserves, and having these much lower thirdquarter provisions could be a catalyst for the sector to finally provide leadership. You saw in the trading numbers how they are doing. Jp morgan saw a 30 jump in markets revenue. Citis fixed income and commodities trading had its best quarter in years. But you look at stock performances today, they are down, investors not convinced we have seen the worst when it comes to bad loans . David yes, see