The 2024 presidential election is just around the corner, and one of the candidates vying for the presidency is former President Donald Trump.
Despite being a polarizing figure, there’s no denying that Trump’s policies had a significant impact on the economy during his tenure. We’ll explore what a potential Trump win in 2024 could mean for your paycheck.
See: How Rich Is Former President Donald Trump?Find: 3 Ways To Recession-Proof Your Retirement
Tax Cuts and Job Growth
One of the critical aspects of Trump’s economic agenda was tax cuts. During his presidency, he passed the Tax Cuts and Jobs Act (TCJA) in 2017 to stimulate economic growth.
If Trump were to win in 2024, he would likely continue focusing on tax cuts, potentially leading to more money in your pocket.
One of the main aspects of the TCJA was reducing tax rates for individuals and corporations. By lowering tax rates, the act intended to put more money in people’s pockets, potentially leading to increased spending and investment. Additionally, the TCJA nearly doubled the standard deduction, which benefited many taxpayers by reducing their taxable income.
The TCJA also made changes to certain deductions and credits. While some deductions — like the state and local tax (SALT) deduction — were eliminated or limited, the child tax credit was expanded, potentially providing more financial relief to families with children. The act also introduced a new deduction for qualified business income for specific self-employed individuals and small business owners.
The Tax Cuts and Jobs Act had a mixed impact on people’s paychecks, depending on their income level, family size, and location. For some, reduced tax rates and increased deductions may have resulted in noticeable savings. On the other hand, individuals in higher-tax states or those who relied heavily on certain itemized deductions may not have seen significant improvements.
“Rich people and companies saved the most money,” said Ashley Akin, a certified public accountant. “The government also borrowed more money because of these tax cuts. If Trump becomes president again, we might see these tax cuts return. 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 increase.”
While the TCJA aimed to stimulate economic growth, its long-term effects on the economy and job market are still being debated. Some argue that the tax cuts encouraged business investment and job creation. Others contend that the tax cuts primarily benefited corporations and high-income individuals, with little trickle-down effect for the average American.
While President Biden has called for eliminating Trump’s tax cuts, his administration has only focused on specific aspects of the law, like the corporate tax rate or income tax rate for high-income individuals. If Trump is re-elected, it’s all but certain he will keep these tax cuts in place — or roll taxes back further.
Also: How Much Is President Joe Biden Worth As He Seeks Re-Election?
Trade Policies and Global Impact
Another significant aspect of Trump’s presidency was his approach to trade policies, focusing on protecting American industries. Trump implemented tariffs on imported goods from countries like China to address trade imbalances and protect domestic industries. This protectionist approach was meant to encourage the growth of American businesses and bring back manufacturing jobs.
There was a potential positive effect for some workers in industries protected by these tariffs, such as steel and aluminum. These workers might have seen increased job security and even higher wages due to reduced competition from cheaper imports.
However, many businesses that relied heavily on imported goods or materials faced higher costs due to the tariffs. Some employers may have had to reduce their workforce, freeze wages, or cut back on employee benefits to offset these expenses. Sometimes, these businesses passed these higher costs to consumers through higher prices.
Retaliatory tariffs imposed by other countries in response to Trump’s trade policies also had adverse effects. These retaliatory measures often targeted American agricultural products, causing significant disruptions in the farming industry. Farmers faced decreased demand and lower prices for their goods, leading to financial hardships.
It’s important to note that the overall impact of Trump’s trade policies on paychecks varied depending on the industry. The complex nature of global trade makes it challenging to pinpoint a universal effect on people’s paychecks.
If Trump were to secure another term, he would likely continue this tough stance on trade. While this approach may protect specific sectors of the economy, it could also lead to higher prices on imported goods, potentially impacting consumers’ purchasing power.
“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 affect how much money you save. But, what happens will depend on the new laws and other things happening in the world at that time.”
Infrastructure and Job Creation
During his first term, Trump emphasized the need for infrastructure investment in the United States. He proposed a $1.5 trillion infrastructure plan to rejuvenate American roads, bridges, and airports.
If reelected in 2024, Trump may continue prioritizing infrastructure development, which could positively impact job creation. This is also in line with what President Biden has been advocating for.
Investing in infrastructure projects means more job opportunities, increased employment rates, and potentially higher wages for workers in these industries.
Healthcare and Insurance Costs
One area where Trump’s policies had a significant impact was healthcare. While his attempts to repeal the Affordable Care Act (ACA) were unsuccessful, his administration did make changes that affected insurance costs.
Trump expanded the availability of short-term, limited-duration health plans, which offered lower premiums but fewer coverage benefits.
He has also expressed his intention to lower prescription drug prices. If successful, this could reduce the cost burden on individuals and families who rely on medications for their health needs.
Lastly, Trump has promoted the use of HSAs, which allow individuals to save money on a pre-tax basis for medical expenses. If his plans to expand HSAs are implemented, it could give individuals more flexibility in managing their healthcare costs.
If Trump were to secure another term, it’s possible he would continue his efforts to modify the healthcare system. While this may lead to lower premiums for some individuals, it could also reduce coverage options.
The ACA provides subsidies to help lower-income individuals and families afford health insurance, and a repeal could affect those subsidies. The Act also prohibits health insurers from denying coverage or charging higher premiums based on pre-existing conditions.
If the ACA is successfully repealed, this could lead to changes in health insurance coverage and costs and make it harder for individuals with pre-existing conditions to find affordable health insurance.
Closing Thoughts on a Potential Trump 2024 Win
While it’s impossible to predict the future with certainty, examining the potential implications of a 2024 Trump win on your finances can help you better understand and prepare for the possible economic outcomes.
Tax cuts, trade policies, and healthcare changes are all factors that could shape the economic landscape.
Regardless of your political affiliation, being informed and staying proactive with your finances is essential. Ultimately, many things influence your paycheck, and understanding the potential impact of a Trump win in 2024 is just one piece of the puzzle.
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This article originally appeared on GOBankingRates.com: What a 2024 Trump Win Would Mean For Your Paycheck
