The 2024 presidential election is less than a year away — and the economy is going to be a top issue for most Americans. Half of Americans say their financial situation is worse off than it was three years ago during the last presidential election, according to a recent survey reported on by Fox Business.
Donald Trump’s presidency had a significant impact on the collective wallets of people across the United States. From tax reforms to trade policies, his administration implemented various measures that directly influenced the financial landscape. As we analyze the implications of a potential second term for President Trump, it is essential to consider the effects of his first term and the interceding Biden presidency.
Trump’s Tax Policy
One of the most notable changes during Trump’s tenure was the Tax Cuts and Jobs Act of 2017. This legislation aimed to stimulate economic growth by reducing corporate tax rates and providing tax relief for individuals.
While the tax cuts did benefit many Americans, the distribution of these benefits was a subject of debate. Many critics argue that the wealthy and corporations disproportionately gained from the tax cuts while the middle class received comparatively modest reductions.
“When Trump was president, he signed a tax law that lowered taxes for most people and businesses. This meant people were able to keep more of their money before paying taxes to the government,” says Ashley Akin, certified public accountant and contributor at MakeGood. “Rich people and companies saved the most money.”
The government was forced to borrow more money to cover these tax cuts, Akin explains. If Trump becomes president again, we may see more tax cuts.
“This could be good for rich people and companies, but everyday people might not save as much, especially if the cost of things continues to go up,” she said.
The tax reforms also brought about changes in deductions and exemptions. The standard deduction was increased, simplifying the tax filing process for many individuals. However, some deductions that were previously available, such as the state and local tax (SALT) deduction, were capped, affecting residents of high-tax states like California and New York.
Trump’s Trade Policy
Another area where Trump’s presidency had a direct financial impact was trade policy. His administration pursued an aggressive stance on international trade, advocating for fairer deals and protecting American industries.
The imposition of tariffs on imported goods from countries like China resulted in trade tensions and retaliatory tariffs. While this approach aimed to protect American jobs and industries, it also led to increased prices for consumers and disrupted supply chains.
“If Trump wins again, he might make more changes in how America buys and sells things with other countries,” says Akin. “This could make prices for things like stocks change a lot and could affect how much money you end up saving. But, what really happens will depend on the new laws and other things going on in the world at that time.”
Stock Market Performance Under Former President Trump
The stock market experienced significant fluctuations during Trump’s presidency. The market initially responded positively to the promise of tax cuts and deregulation, leading to record-breaking highs. However, uncertainties surrounding trade policies and geopolitical tensions created periods of volatility. The COVID-19 pandemic further amplified these fluctuations, causing a market crash followed by a strong recovery.
It is important to note that while stock market performance can impact individual investment portfolios, its direct effect on everyday Americans’ wallets is less pronounced unless they have significant investments in the stock market.
Job Market Performance Under Trump
The impact of Trump’s economic policies on the labor market was a subject of much debate. Unemployment reached record lows before the pandemic, partially attributed to the administration’s focus on deregulation and job creation.
However, critics argued that job growth was a continuation of an upward trend from the previous administration rather than a direct consequence of Trump’s policies. The pandemic-induced economic downturn led to a spike in unemployment, challenging the notion of long-lasting improvement under Trump’s presidency.
Medicare During the Trump Administration
Medicare, the federal health insurance program for Americans aged 65 and older, experienced some changes during the Trump presidency.
One of the notable changes was the expansion of telehealth services. During the COVID-19 pandemic, the Trump administration took steps to expand telehealth services, making it easier for Medicare beneficiaries to access virtual healthcare appointments. This change increased convenience and improved access to care, particularly for those in rural or underserved areas.
However, the Trump administration also proposed significant changes to Medicare funding. One proposal aimed to reduce Medicare spending by implementing a single payment system for certain services, known as the International Pricing Index (IPI) model. The administration also proposed expanding the scope of services covered by Medicare Advantage plans, allowing for more flexibility in providing additional benefits beyond the traditional Medicare program.
Trump on the Student Loan File
The Public Service Loan Forgiveness (PSLF) program was established to forgive federal student loans for borrowers who work in public service jobs for 10 years while making qualifying payments.
However, under the Trump administration, the program faced scrutiny and underwent changes that made loan forgiveness more challenging to attain. The eligibility criteria became stricter, and many borrowers found themselves disqualified or facing delays in loan forgiveness.
Another notable change was the revocation of certain protections for student loan borrowers. In 2017, the Trump administration rolled back Obama-era regulations aimed at protecting borrowers from predatory practices by loan servicers. This left many borrowers with fewer options for recourse in case of mistreatment or unfair practices.
The Biden Presidency So Far
As we consider the potential effects of a second Trump term, it is crucial to acknowledge the changes that occurred during Joe Biden’s presidency. Biden’s economic agenda focuses on increasing taxes on the wealthy and corporations while providing relief for the middle class.
Proposed policies include expanding healthcare coverage, investing in infrastructure, and promoting renewable energy. These measures could potentially counterbalance some of the impacts of Trump’s policies, particularly in terms of wealth distribution.
However, a second Trump term would likely continue the path set during his first term. Tax policies and trade relations would likely remain a key focus. Trump has expressed his intention to further reduce taxes, particularly for middle-income households, and continue his tough stance on trade with China. The outcome of these policies would depend on various factors, including the global economic landscape and political dynamics.
What’s To Come in 2024
The financial impacts of any presidency extend beyond direct policies. Factors such as global economic trends, technological advancements, and unforeseen events like the COVID-19 pandemic can significantly influence personal finances.
While a president’s policies undoubtedly have an impact, the complexity of the global economy means that it is challenging to attribute all financial changes solely to one individual or administration.
As we consider the potential implications of a second Trump term, it’s important to recognize the interplay between his policies, the Biden administration’s current actions, and external economic factors. Only by understanding this complex web can we gain a clearer picture of how our wallets may be affected in the future.
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This article originally appeared on GOBankingRates.com: What Donald Trump’s Presidency Meant for Your Wallet — And How It Could Change If He Wins Again