Trump Wins: Here’s How the Election Could Impact Your Wallet

As the presidential race heats up, Americans are paying close attention to how each candidate’s policies could affect their personal finances. From tax proposals to childcare costs, the choice between a Trump or Harris presidency could shape the economic landscape in ways that influence household budgets and long-term financial planning. Here’s a look at how policies from each candidate may impact your wallet across key areas such as investments, taxes, housing, inflation, and childcare.

Investments: Market Stability vs. Sector-Specific Growth

Trump’s Approach
Former President Trump has proposed lowering the corporate tax rate, which he argues would spur economic growth, particularly in sectors like consumer discretionary, financial services, and communication services. While his plan might boost certain stock values and dividends, it could also introduce market volatility. Trump’s proposed tariffs on imports could drive up inflation, affecting interest rates and potentially lowering bond prices. However, Trump’s stance on cryptocurrency remains favorable, which could draw more investors into digital assets.

Harris’ Approach
Vice President Harris has a different approach, focusing on tax reforms that would raise corporate taxes, especially for large corporations. Her regulatory focus may slow growth in financial services but is seen as potentially stabilizing for other industries like renewable energy and homebuilding. Harris’ plans are anticipated to keep inflation more stable, as her policies are viewed as less inflationary than Trump’s, likely resulting in lower interest rates and higher bond values. She also supports cryptocurrency initiatives, aligning with growing investor interest in digital finance.

Taxes: Competing Visions on Corporate and Individual Relief

Trump’s Approach
Under Trump, Americans could see a reduction in the corporate tax rate from 21% to 15% for U.S.-based companies, a move expected to benefit high-income earners and corporations. Trump also aims to extend the Tax Cuts and Jobs Act, which would make his previous tax cuts permanent, primarily benefiting the top 0.1% of earners with substantial income relief. For middle-income households, the impact would be minimal, with tax cuts amounting to about $1,000. However, Trump’s broad tariff plans could offset some tax savings, with lower-income Americans bearing a significant share of the resulting price increases.

Harris’ Approach
Harris’ tax plan includes a hike in the corporate tax rate from 21% to 28%, while also proposing enhanced support for small businesses. She seeks to expand the Earned Income Tax Credit (EITC) for lower-income earners and restore the child tax credit to pandemic-era levels, providing up to $3,600 per child. For high-income earners, Harris advocates for a minimum tax on billionaires and aims to address tax loopholes benefiting the ultra-wealthy. This balanced tax structure could benefit lower-income households while placing a higher tax burden on the wealthiest Americans.

Housing: Tackling Supply and Affordability Issues

Trump’s Approach
In tackling the housing shortage, Trump has proposed policies to reduce demand by restricting mortgage access for undocumented immigrants and has suggested mass deportations as a way to ease housing competition. His track record includes opposing high-density housing in single-family-zoned neighborhoods, which he believes could preserve property values in suburban areas. However, such policies may limit affordable housing options and could hinder efforts to address housing accessibility.

Harris’ Approach
Harris has committed to expanding affordable housing with a plan to build 3 million new housing units and provide tax credits for low-income housing developments. Additionally, she proposes a $40 billion federal fund to incentivize local governments to support new housing construction, a move that could lower housing costs in high-demand areas. Harris also advocates for curbing large-scale property acquisitions by corporate landlords, a measure aimed at making single-family homes more accessible to individual buyers.

Inflation: Addressing Import Costs and Domestic Prices

Trump’s Approach
Trump’s tariff plan, which includes a 10%-20% tax on imported goods, is expected to raise costs for consumers, especially in categories like automobiles, furniture, and household appliances. While Trump has promised to lower grocery prices by supporting domestic producers, his tariffs could offset this by raising the prices of goods heavily reliant on imports. Higher inflation could lead to increased interest rates, potentially affecting the affordability of loans and mortgages.

Harris’ Approach
Harris’ approach to inflation is less aggressive, with a focus on managing supply chains and tackling price gouging. Her import policies are seen as less inflationary than Trump’s, and she has introduced a plan to regulate food prices during national emergencies. For healthcare, Harris aims to expand Medicare’s ability to negotiate drug prices, a move she believes will alleviate rising medical costs without adding to inflation. Her stance aligns more closely with maintaining stable prices for essential goods.

Childcare: Affordability and Access

Trump’s Approach
Trump has shown support for expanding the child tax credit, with a recent proposal by Vice Presidential candidate J.D. Vance suggesting $5,000 per child. While this expansion could provide relief for families across income levels, Trump has not recently addressed broader issues of childcare costs. In his previous term, he supported federal employees with paid parental leave but has yet to make this a focus in the 2024 campaign.

Harris’ Approach
Harris proposes a comprehensive plan to cap childcare costs at 7% of household income, addressing the financial strain felt by many families with young children. Her childcare tax credit proposal seeks to restore pandemic-era support, providing up to $3,600 annually per child based on family income and the child’s age. Harris has also endorsed a paid-leave policy of up to six months, which would allow parents to care for new children or family members in need without jeopardizing financial stability.

Final Thoughts: Weighing Economic Choices

The decision between a Trump or Harris presidency presents Americans with contrasting economic policies that could shape personal finances and the broader economy in significant ways. Trump’s approach emphasizes corporate incentives and protectionist policies but could bring inflationary pressures that affect the cost of living. Harris’ policies focus on accessible housing, expanded tax credits for families, and inflation management, aiming to balance economic growth with affordability. As the election draws near, voters may want to consider which policies align best with their financial goals and the economic future they envision for the country.