Donald Trump Is the President-Elect. Here's What It Means for Your Wallet
Early this morning, the Associated Press declared Republican nominee Donald Trump the winner of the 2024 presidential election. And though nothing is certain, we do have a few clues as to how a second Trump presidency could affect Americans’ wallets in the short term.
House Majority Leader Steve Scalise, R-La., told nonprofit news website NOTUS last month that righting the economy will be at the top of Trump’s post-inauguration to-do list.
“I’ve already talked to President Trump about the top priorities he would want,” Scalise said. “The main things we’ve been talking about is getting the economy back on track and securing the border.”
Many of Trump's proposals would require the approval of Congress, where it appears Republicans regained control of the Senate while the final split of the House of Representatives is still in flux.
Here’s what we know about how Trump’s electoral victory could affect your wallet.
Inflation
Inflation was the buzzword of the 2024 presidential election, given that many Americans are still struggling to make ends meet over two years after post-pandemic inflation peaked at 9.1%. So it’s safe to expect Trump, a seasoned businessman, to try to promptly tackle the cost-of-living crisis, likely using the five-point plan he outlined in the GOP platform.
His solutions include increasing American energy production, slashing wasteful government spending, reinstating deregulation policies, curbing illegal immigration and improving geopolitical stability.
“On Day One, I will sign an executive order directing every federal agency to immediately remove every single burdensome regulation driving up the cost of goods,” Trump said at a Halloween rally in New Mexico. He then took it one step further, vowing to add a cabinet official focused on inflation if elected.
But inflation is actually near the Federal Reserve’s preferred level of 2% in the long run, and economists have warned that a second Trump presidency could “reignite” sky-high price increases. One thing analysts will probably be watching in the months ahead is how Trump interacts with the Fed, which is set to announce another interest rate cut Thursday. Although Trump said in July he wouldn’t fire Fed Chair Jerome Powell, Reuters reported that the former president recently expressed hope that he could influence the central bank’s decisions to adjust the federal funds rate.
"I think I have the right to say I think you should go up or down a little bit. I don't think I should be allowed to order it, but I think I have the right to put in comments as to whether or not the interest rates should go up or down," he said.
Tax cuts
Trump built his 2024 tax pitch around the Tax Cuts and Jobs Act, or TCJA, a sweeping 2017 tax law he signed while in office. Because many TCJA provisions are scheduled to expire at the end of 2025, Trump ran on both extending them and making them permanent. Specifically, per the GOP’s platform, he intends to immortalize the policies “that doubled the standard deduction, expanded the Child Tax Credit, and spurred Economic Growth for all Americans.”
“If you vote for me, I’m going to reduce your taxes,” Trump said at a September campaign rally in New York.
It’s not quite that simple. The TCJA did save many Americans money, but the impact wasn’t equal across the board. While the average taxpayer saw their taxes reduced by about $1,600 in 2018, households that earned between $308,000 and $733,000 experienced the most significant tax cuts. There may be a similar outcome this time around: According to the Institute on Taxation and Economic Policy, Trump’s tax proposals would end up cutting taxes for the wealthiest 5% of Americans — but they’d result in a tax increase for other income groups.
Those aren’t the only tax changes Trump will likely try to enact once he’s back in the White House. During his campaign, the former president promised to eliminate taxes on Social Security benefits, overtime pay and tips. Staffers for top-ranking GOP lawmakers like Scalise and Senate Republican Leader Mitch McConnell, R-Ky., have reportedly already met about how to advance a budget reconciliation package containing Trump’s tax proposals within his first 100 days.
Tariffs
Aside from taxes, voters can expect Trump to take action on tariffs once he’s back in the White House. Trump, who has called the term tariff the "the most beautiful word in the dictionary," has laid out an ambitious plan to levy tariffs on imported goods in hopes of creating manufacturing jobs and decreasing the national deficit. He’s proposed a tariff of up to 20% on goods that come from most foreign countries, though that number climbs to 60% for items from China and as high as 100% for imports from Mexico.
“The higher the tariff, the more likely it is that the company will come into the United States and build a factory in the United States so it doesn’t have to pay the tariff,” he said at a meeting of the Economic Club of Chicago last month.
Although Trump swears other countries will bear the financial burden of tariffs, experts have said everyday Americans will actually end up paying for them because businesses will raise their prices to cope. An August analysis from Peterson Institute for International Economics found that Trump’s tariffs would cost the average American household about $2,600 annually. Already, executives at companies like AutoZone have admitted they’re planning on price hikes to offset the cost of Trump’s tariffs.
Mark Zandi, the chief economist at Moody’s, told CNBC that tariffs on the scale proposed “will act as a massive tax increase on American families as they pay more for all imports, cutting into their purchasing power and thus weighing heavily on their spending and the overall economy.”
The tariffs may also have geopolitical implications.
Health insurance
House Speaker Mike Johnson, R-La., promised “massive” health care changes on the campaign trail, adding that “health care reform’s going to be a big part of the agenda” for Trump’s second term, according to NBC News. What, exactly, that means for the sweeping Affordable Care Act — aka Obamacare — is unclear.
Although Johnson went on to say at a Pennsylvania rally that the reforms would mean “no Obamacare,” a Trump spokesperson told NBC News that repealing the 2010 law is not the president’s policy position. Rather, he’s focused on making “our health care system better by increasing transparency, promoting choice and competition and expanding access to new affordable health care and insurance options.”
Trump is a longtime critic of Obamacare, which he called “lousy” during the September presidential debate. On his first day in office in 2017, he signed an executive order to repeal it, and in 2020, he included a replacement for the Affordable Care Act in his 2020 budget proposal, according to the nonprofit group KFF. Though he never succeeded in repealing it, Trump did weaken Obamacare. During his presidency, Congress nixed the individual mandate penalty as part of the TCJA. His administration also stopped paying cost-sharing subsidies and he expanded “skinny” short-term plans via executive order.
Looking forward, he says he intends to reel in out-of-control health care and prescription drug costs and strengthen Medicare, per his platform, promoting choice, competition and services for veterans. As far as specific reform goes, Trump has said he has “concepts of a plan.” He’s also indicated he intends to appoint Robert F. Kennedy Jr. to run federal health agencies.
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