What a Trump Win Means for Your Finances and the Economy – NerdWallet

When former President Donald Trump returns to his shoes as Leader of the Free World, he will need to act on some of the economic promises he made.

Trump’s success will depend on many factors and it is not clear what proposals he will pursue and what he will cut from Congress. Here is a list of what Trump promised on the campaign trail:

Inflation, as measured by the consumer price index, has fallen to 2.4%, from its pandemic-induced peak. Trump has promised to lower prices and delay inflationbut whether the president can do so directly is uncertain.

• Place tariffs on imports. Trump wants to impose a tariff of 10% to 20% on all imports; up to 60% tariffs on imports from China; and 100% to 200% imports in vehicles produced in Mexico. He says his tariffs will support US manufacturing and boost the economy. But experts from across the political spectrum say his tariff plan is likely to increase prices in the US

• Low gas prices. Trump has promised to increase oil and gas production on federal lands. Of the president ability to lower gas prices limited as pump prices are directly influenced by global market forces.

• Reduce the power of the Federal Reserve. Trump says he wants to bring the Federal Reserve under the authority of the president; experts say that it can weaken the credibility of the central bank to make decisions on interest rates.

• Credit card interest rate is around 10%. The average credit card interest rate is 21.51%, according to Federal Reserve data as of May 2024. It would require legislation from Congress and could face legal pressure.

Campaign proposals that can directly affect consumers are tax cuts and loans.

• Add tax cuts to his 2017 Taxes and Jobs Act which expire at the end of next year. The TCJA includes both estate tax cuts and individual tax cuts.

• Leave personal income tax with fees. His new plan would impose 10% tariffs on imports and more for China. More than that above.

• Cut the corporate tax rate by one percentage point. Trump wants to cut the corporate tax rate from 21% to 20%.

• Implement R&D tax credits for businesses. The tax credits will allow businesses to write off 100% of expenses in their first year, including machinery and equipment. It is a change in his 2017 tax deductions that eliminated R&D payments in the first year of business.

• There is no tax on tips. Exempting employees from paying taxes on their tips. Experts say it’s just a bad policy that doesn’t meet the basic needs of guaranteed workers.

• See also the Affordable Care Act. Trump tried to repeal and replace the Affordable Care Act during his first term, but to no avail. During the presidential debate on Sept. 10, he was asked if he would try again. In response, Trump said he only had “thoughts” about the new plan.

• Push for in vitro fertilization (IVF) coverage. Trump has said the government or insurance companies should cover IVF, although many in the GOP oppose the idea.

• Leave abortion laws to the states. He says he will oppose any government ban on abortion.

Trump’s plans are limited when it comes to housing. However, experts say his plans to deport millions of illegal immigrants may raise housing prices as the construction industry relies on immigrant labor. Here are some suggestions:

• Open federal areas for new housing development. And it has not explained which countries will include, but experts say that most of the land held by the government would not be good for creating new homes. There are precedents for using federal land to build housing; the most accessible country is in the West.

• Cut the red tape. Reducing the regulatory burden has bipartisan support, but many housing reforms will need to be implemented at the local level to have an impact.

• Prevent debt cancellation. Trump may not support comprehensive student loan forgiveness or strengthen other amnesty plans that the Biden-Harris administration has proposed. Trump also said that access to existing loan forgiveness should be restricted, including Public Service Loan Forgiveness (PSLF) program.

• Open SAVE. Trump is likely to wind up SAVE, a cash-driven reimbursement program that is currently plagued by legal challenges.

• Support vocational training. Trump’s platform says he will support creating “alternatives that are much more expensive than the standard four-year college.”

Trump’s plan to deport illegal immigrants in large numbers may have been unintended, but the major economic consequences include:

• Increasing costs in the wider economy. A reduction in labor supply can increase costs for businesses and, ultimately, be passed on to consumers. It will particularly affect the hospitality and service industries that rely on foreign workers.

• Driving up food prices. Immigrants make up a large part of the agricultural workforce. Without that job, the US food supply could tighten, which would push up prices.

• Delay in housing construction since immigrants play a large role in the creation of housing in the US This could further exacerbate the shortage of affordable public housing.

In Trump’s second term, he will have to contend with Congress, which means that fulfilling campaign promises will be very difficult. But in the unlikely event that his plan comes true, here’s what economists say could happen.

The letter released on Oct. 23 and signed by 23 Nobel Prize-winning economists affirms that “Trump’s policies, including higher tariffs and even imports from our friends and allies and tax cuts that reduce taxes for of businesses and individuals, will lead to higher prices, greater deficits, and greater inequality.” The letter also said that Trump would “threaten” three factors of economic success: “the rule of law and economic and political certainty.”

The letter was preceded by another letter released on June 25 by 16 Nobel Prize-winning economists who wrote that Trump’s economic proposals will lead to inflation and pose other risks to the economy. The letter stated that “The outcome of this election will have economic consequences for years, perhaps even decades to come. We believe that Trump’s second statement could have a negative impact on the US economic position in the world and a damaging effect on the US national economy. “

By 2025, Trump will be at the forefront of three potential wars: the threat of a government shutdown; the expiration of the credit limit is suspended; and the expiration of the Tax Cuts and Jobs Act of 2017.

An analysis by economists at Moody’s Analytics, the research arm of one of the world’s leading credit institutions, projects that Trump’s economic policies will be inflationary and could lead to recession by mid-2025.

The biggest contributors to this situation would be if Trump goes through with his overreaching tax and immigration proposals. Moody predicts that Trump can make these changes through an executive order and with the support of Republicans in Congress.

• Low, middle and upper class families benefit under the fulfilled campaign promises to expand the provisions of the 2017 Taxes and Jobs Act; eliminate taxes on Social Security benefits; and lowering the corporate income tax rate.

• Deficits would increase at an estimated cost of $4.1 trillion over 10 years.

• GDP would initially increase before falling by 0.4% in 2034 and by 2.1% within 30 years.

• Wages would initially increase and then stagnate in 2034 and a decrease of 1.7% in 2054. a decrease of 0.8% in 2034 and 3.3% in 2054 due to a decrease in capital investment and working hours.

Center for Tax and Economic Policy

Trump’s tax cuts could provide the biggest benefit to high-income Americans by 2026:

• A 4.8% increase for those earning $0 to $28,600 annually

• 3.5% increase for those earning $28,600 to $55,100

• 2.1% increase for those earning $55,100 to $94,100

• 1.4% increase for those earning $94,100 to $157,500

• 0.3% increase for those earning $157,500 to $360,000

• A 1.3% decrease for earnings of $360,000 to $914,900

• A reduction of 1.2% for the richest 1% – those who earn $914,900 and above.

Hosts Sean Pyles and Anna Helhoski discuss the big economic promises made by presidential candidates and the complex realities of the president’s impact on the economy to help you understand the real effects on your everyday finances.