The 2016 election is finally over, and despite the long odds most pollsters gave him, Donald Trump is going to be sworn in today as the next President of the United States. Moreover, he will assume the Presidency with Republicans fully in control of the Senate and House. Yet another unexpected development on election night. While President-Elect Trump’s policies may impact Americans in a myriad of ways. From the wars we are fighting in Iraq and Syria, to the promises he made to “build a wall” on the southern border and halt illegal immigration. Trump’s election is likely to affect the economy profoundly as well.
Here are four ways that President Trump may affect your wallet in the days to come.
Taxes
The Trump Campaign has detailed plans for taxes, focused mainly on lowering them. He has proposed three tax brackets for joint filers: 12 percent for incomes under $75,000, 25 percent for incomes $75,000 to $225,000, and 33 percent for everyone above $225,000.
When you compare them to the current tax brackets most people would experience significant relief, although the lowest proposed tax bracket is slightly more than the current one. Trump’s tax plan would increase the standard deduction to $30,000, eliminate the personal exemption, and cap overall deductions at $200,000.
Most, but not all, people stand to gain from this tax plan, so make sure you monitor IRS.gov if and when the final plan becomes law and goes into effect.
Childcare May Affect your Wallet
The Trump campaign, surprisingly, developed a fairly detailed plan for helping families shoulder the high costs of childcare. For starters, the campaign’s plan offers an above the line deduction (which does not have to be itemized) of up to $5000 for childcare costs.
Additionally, Trump’s campaign proposed an earned income tax credit for childcare for families making up to $62,400 ($31,200 for single). Also proposed was a “dependent care savings account, with the government providing matching funds for low- income families. This plan would have to navigate a congress that typically does not favor programs like these. However, it would have a major positive effect on families’ wallets if it were eventually signed into law.
Healthcare
The Republicans have wanted to dismantle the Affordable Care Act almost since the moment that President Obama signed it into law. With control of the White house and both chambers of Congress, they are poised to make their goal a reality. Throughout his entire campaign, then-candidate Trump also vowed he would repeal Obamacare. This could severely affect your wallet. What the Republicans replace it with, however, is far from settled.
If Obamacare were repealed, people who are receiving subsidies for their health insurance would almost certainly pay more for health insurance. For other people, the effects of a repeal are far less certain. Younger, healthier individuals would likely pay less than they are now, for instance.
Additionally, besides the Obamacare repeal, the Trump campaign has suggested some less dramatic changes to healthcare policy, such as allowing full deductions for premiums on taxes, allow the sale of health insurance across state lines, and expanding access to health savings accounts.
Investments
Where the economy, and by extension the stock market, goes under a Trump administration is anyone’s guess. Judging from election night and its immediate aftermath, that guess is a pretty wild one. Shortly after it became apparent that Trump would win the election, futures dropped precipitously; economist and New York Times writer Paul Krugman suggested that the markets might not ever recover.
In the days since, however, many U.S. stock market indexes have subsequently reached close to record highs. The lesson to garner from this tumult is that nothing is certain. Presidencies largely do not affect the stock market over the long term. So if you have a long-term investment strategy, it makes sense to stick with it.
