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  1. Economy and Politics
  2. POTUS

Election Day 2020 and Your Money: Trump vs. Biden on 401(k)s, Taxes and Other Key Issues

By: Julia Glum
Julia Glum, expert in the IRS, taxes, credit scores, saving, colleges, mobile payment apps, and Managing Editor at Money
Julia Glum
Managing Editor | Joined February 2018
Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money.
See full bio
and Kaitlin Mulhere
Kaitlin Mulhere, expert in Student loans, college costs, and Editor at Money
Kaitlin Mulhere
Editor | Joined March 2015
Kaitlin Mulhere is an editor at Money.com. Since joining in 2015, she’s written and edited about a variety of personal finance topics, including banks, credit, student debt, saving strategies and more.
See full bio
Published: Nov 03, 2020 10 min read
Money; Getty Images

While there’s a lot we don’t know about this week's election, one thing is clear: Whoever wins the presidency will have the Herculean task of guiding Americans through a recovery from one of the worst recessions in history.

It's no surprise that President Donald Trump and challenger Joe Biden have very different ideas about how, exactly, to do that.

As we wait for election results to roll in, here are seven quick summaries of the candidates’ stances on key money issues. Check them out, then read our in-depth reporting at the links below.

401(k)s

Biden: On his website, Biden vows to “call for widespread adoption of workplace savings plans and offer tax credits to small businesses to offset much of the costs.” Specifically, nearly all employees without a 401(k)-type plan or pension would be able to access an automatic 401(k). He’d also equalize tax benefits for retirement savings accounts by shifting more of the benefits of tax deferral in traditional retirement accounts toward lower- and middle-income earners.

Trump: The president often boasts about the nation’s economic success. Indeed, according to Fidelity Investments, the average 401(k) balance in the second quarter was $104,400 — a rebound from the $91,400 it was after the first quarter of 2020. Trump suggested in a debate that “401(k)s will go to hell” under Biden.

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College costs and student debt

Biden: Biden has promised to eliminate tuition at public two- and four-year colleges as well as increase grant funding for lower-income students by doubling the federal Pell grant. For student loan borrowers, Biden has said he supports widespread debt forgiveness, including forgiving $10,000 for every borrower as a relief from the coronavirus pandemic. He'd also like to forgive debt taken on for undergraduate tuition at public colleges and historically black colleges and universities (HBCUs) for Americans earning less than $125,000.

Trump: Trump’s campaign hasn’t put out a robust higher education platform, but we can expect in a second term his administration would continue to emphasize access to data on earnings and debt as a way to help families make more informed choices about whether and where to go to college. Trump also previously suggested streamlining the current income-driven repayment plans into a single plan where borrowers would have to pay 12.5% of their discretionary income for up to 15 years for undergraduate borrowers. (The most common of the current plans requires monthly payments of 10% of a borrower's income before getting forgiveness after 20 or 25 years.)

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Health care

Biden: As vice president, Biden worked with Barack Obama to pass the Affordable Care Act, and as president, he wants to build upon that legislation. On his website, he says he’ll do this by “giving Americans more choice, reducing health care costs, and making our health care system less complex to navigate.” The Democrat proposes a new public insurance option like Medicare with an emphasis on affordability.

Trump: Trump’s campaign website says he wants to “cut prescription drug prices, put patients and doctors back in charge of our health care system, lower health care insurance premiums, end surprise billing” and more. He's not released any details but says he plans to protect Medicare, veterans and people with pre-existing conditions (he signed an executive order to that effect in September). The U.S. Supreme Court is set to hear a case to overturn the Affordable Care Act later this month.

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Jobs and the economy

Biden: Biden has said his economic plan, which includes investing in clean energy, increasing domestic manufacturing and improving the country’s infrastructure, will create at least 5 million new jobs. He also supports increasing the federal minimum wage to $15 and says his coronavirus recovery plan (more on that below) will help bring back some of the millions of jobs lost this year.

Trump: The president’s campaign platform says he will create 10 million new jobs in 10 months, as well as 1 million new small businesses. (For comparison, nearly 6.6 million new jobs were added to the labor market during his first three years.) He’s also said he wants to bring back manufacturing jobs from China and will protect American jobs with better trade deals.

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Pandemic recovery

Biden: Biden's campaign has highlighted an eight-part plan to help the economy fully reopen and rebound. It includes paying for testing and personal protective equipment "for every worker called back on the job," guaranteeing paid leave for workers who get sick, building a national contact tracing system by hiring at least 100,000 people and giving additional money to small businesses.

Trump: Trump has repeatedly said that the economy will rebound as soon as there is a vaccine. His campaign website says his administration will oversee a vaccine development by the end of 2020 and a "return to normal in 2021." (Public health experts have warned that even once a vaccine is available, it will take several months to vaccinate enough people to reach herd immunity.)

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Stimulus checks

Biden: The former veep has shared an Emergency Action Plan to Save the Economy on his campaign website. In it, he says that the first round of $1,200 stimulus checks in the spring was “a good start” but “a one-off.” Among other initiatives, Biden’s plan promises to “provide for additional checks to families should conditions require” — though he does not give specifics.

Trump: The White House has repeatedly expressed support for another round of direct relief, but Trump’s allies have been fighting with House Speaker Nancy Pelosi over the price of another coronavirus relief bill for weeks. The president promised that “after the election, we’ll get the best stimulus package you’ve ever seen,” even saying he “would like to see a bigger stimulus package, frankly, than either the Democrats or the Republicans are offering.”

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Taxes

Biden: Biden’s campaign website says he “won’t ask a single person making under $400,000 per year to pay a penny more in taxes.” He’d increase the top individual income tax rate to 39.6% and raise the corporate tax rate to 28%. Biden also wants to create new or expanded credits for childcare, first-time homebuyers and health care.

Trump: The president’s campaign website says he plans to “cut taxes to boost take-home pay and keep jobs in America,” but it doesn’t provide further details. As president, Trump signed the 2017 Tax Cuts and Jobs Act, which doubled the standard deduction, boosted the child tax credit and simplified taxes for many families.

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