What a Trump Win Means For Your Personal Finances and the Economy
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When former President Donald Trump steps back into his Leader of the Free World shoes, he’ll need to get to work on some of the economic promises he’s made.
Trump’s success will depend on a host of factors and it’s unclear exactly which proposals he will pursue and which will make the cut with with Congress. Here’s a rundown of what Trump promised on the campaign trail:
Inflation
Inflation, as measured by the consumer price index, has already slowed to 2.4%, well off its pandemic-fueled peak. Trump promised to lower prices and slow inflation, but whether a president can directly do so is less certain.
Place tariffs on imports. Trump wants to place a 10% to 20% tariff on all foreign imports; up to 60% tariff on imports from China; and 100% to 200% imports on automobiles produced in Mexico. He says his tariffs would support U.S. manufacturing and raise revenue. But experts from all over the political spectrum say that his tariff plan is more likely to increase prices in the U.S.
Lower gas prices. Trump has pledged to increase oil and gas production on federal lands. The president’s ability to lower gas prices is limited as the price at the pump is more directly influenced by global market forces.
Weaken the power of the Federal Reserve. Trump says he wants to bring the Federal Reserve under the power of the president; experts say it could weaken the central bank’s credibility in making interest rate decisions.
Cap credit card interest rates at around 10%. The average credit card interest rate is 21.51%, according to Federal Reserve data from May 2024. It would require Congress to enact and would likely face legal pushback.
Taxes
The campaign proposals that would most directly impact consumers are tax cuts and credits.
Extend tax cuts in his 2017 Tax Cuts and Jobs Act that are expiring at the end of next year. The TCJA includes estate tax cuts and individual income tax cuts.
Replace personal income taxes with tariffs. His new plan would place a 10% across-the-board tariff on foreign imports with much more for China. More on that above.
Lower the corporate tax rate by one percentage point. Trump wants to cut the corporate tax rate from 21% to 20%.
Implement R&D tax credits for businesses. The tax credits would allow businesses to write off 100% of expenses in its first year, including machinery and equipment. It’s a reversal of his 2017 tax cuts that phased out write-offs for R&D expenses in a business’ first year.
No tax on tips. Exempting workers from paying taxes on their tips. Experts say it’s just bad policy that doesn’t get to the fundamental needs of tipped workers.
Dive deeper: What Trump and Harris Have in Store for Your Taxes
Health care
Revisit the Affordable Care Act. Trump tried to repeal and replace the Affordable Care Act in his first term, but was unsuccessful. During the presidential debate on Sept. 10, he was asked if he would try again. In response, Trump said he had only “concepts” of a new plan.
Push for in vitro fertilization (IVF) coverage. Trump has said the government or insurance companies should cover IVF, though many in the GOP oppose the idea.
Leave abortion laws up to the states. He says he would veto any federal ban on abortion.
Dive deeper: How Trump and Harris Aim to Address Your Health Care
Housing
Trump’s plans have been sparse when it comes to housing. However, experts say that his plans to deport millions of unauthorized immigrants could drive up housing prices since the construction industry is reliant on immigrant labor. Here are other proposals:
Open up federal lands for new housing developments. Neither has specified which lands that would include, but experts say much of the federally held land would not be ideal for creating new housing. There is precedence for using federal land to build housing; most available land is in the West.
Cut red tape. Reducing regulatory burden has bipartisan support, but most housing reform would need to be done at the local level to have an impact.
Student loans
Curb debt cancellation. Trump would likely not support broad student loan cancellation or strengthening other forgiveness plans that the Biden-Harris administration has championed. Trump has also said that access to existing loan forgiveness should be restricted, including the Public Service Loan Forgiveness (PSLF) program.
Dissolve SAVE. Trump is likely to strike down SAVE, an income-driven repayment program that is currently caught up in legal challenges.
Support vocational training. Trump’s platform says it would support creating “drastically more affordable alternatives to a traditional four-year college degree.”
Mass deportations
Trump’s plan to deport unauthorized immigrants, en masse, would have unintended, but significant economic consequences including:
Increasing costs economy-wide. Reduced labor supply that would increase costs for businesses and, ultimately, be passed down to the consumer. It would especially impact the hospitality and service industries that rely on immigrant workers.
Driving up food prices. Immigrants make up a large portion of the agricultural workforce. Without that labor, the food supply in the U.S. could tighten, which would drive up prices.
Slowing housing construction since immigrants play a huge part in the creation of housing in the U.S. This could further worsen the nation’s affordable housing shortage.
What economists say another Trump presidency could look like
In a second Trump term, he will have to contend with Congress, which means that enacting campaign promises will be that much harder. But in the unlikely scenario where his entire agenda comes to fruition, here’s what economists say could happen.
Nobel Economists
A letter released on Oct. 23 and signed by 23 Nobel Prize winning economists asserts that Trump’s “policies, including high tariffs even on goods from our friends and allies and regressive tax cuts for corporations and individuals, will lead to higher prices, larger deficits, and greater inequality.” The letter also said that Trump would “threaten” the three determinants of economic success: “rule of law and economic and political certainty.”
The letter was preceded by another letter released on June 25 by 16 Nobel Prize winning economists who wrote that Trump’s economic proposals would lead to inflation and post other risks to the economy. The letter stated “The outcome of this election will have economic repercussions for years, and possibly decades, to come. We believe that a second Trump term would have a negative impact on the U.S.'s economic standing in the world and a destabilizing effect on the U.S.'s domestic economy.”
In 2025, Trump will be at the helm for three potential battles: threat of a government shutdown; the expiration of the debt limit suspension; and the expiration of the 2017 Tax Cuts and Jobs Act.
Moody's Analytics:
An analysis by economists at Moody’s Analytics, a research division of one of the world’s most prominent bond-rating agencies, projects that Trump’s economic policies would be inflationary and could trigger a recession by the middle of 2025.
The dominant contributors to this scenario would be if Trump enacts his across-the-board tariff and immigration proposals. Moody’s predicts that Trump could make these changes via executive order and with backing by Republicans in Congress.
The Wharton School
Low, middle and high-income households benefit under fulfilled campaign promises to extend his 2017 Tax Cuts and Jobs Act provisions; eliminate taxes on Social Security benefits; and lower the corporate income tax rate.
Deficits would increase by an estimated $4.1 trillion over 10 years.
GDP would increase initially before falling by 0.4% in 2034 and by 2.1% within 30 years.
Wages would increase initially then stagnate by 2034 and decline by 1.7% in 2054. decline by 0.8% in 2034 and by 3.3% in 2054 due to a decrease in capital investment and working hours.
Institute on Taxation and Economic Policy
Trump’s’ tax cuts would likely provide the most benefit to highest-income Americans in 2026:
4.8% increase for those earning $0 to $28,600 annually
3.5% increase for those earning $28,600 to $55,100
2.1% increase for those earning $55,100 to $94,100
1.4% increase for those earning $94,100 to $157,500
0.3% increase for those earning $157,500 to $360,000
1.3% decrease for those earnings $360,000 to $914,900
1.2% decrease for the richest 1% — those earning $914,900 and above.
Listen: Smart Money’s 2024 Presidential Election Series
Hosts Sean Pyles and Anna Helhoski discuss the grand economic promises made by presidential candidates and the intricate realities of presidential influence on the economy to help you understand the real effects on your daily finances.
(Photo by Chip Somodevilla/Getty Images News via Getty Images)
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