I’m an Economist: 2 Predictions for Gen Z’s Finances If Trump Wins the Election
Written by
Laura Beck
Edited by
Levi Leidy
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As we approach the next U.S. presidential election, there will be a lot of speculation and debate as to how a Trump win would affect the country in many ways, not least of which is the economy. It’s difficult to predict the exact economic impact of any presidency. But examining Trump’s past policies and current campaign promises can give us some ideas about what might happen.
The consequences of this election will impact every American’s finances – and if you’re a member of Gen Z, it could be especially important. After all, you’re probably financially independent for the first time and navigating the start of your career. You should definitely be aware of how some potential scenarios might affect you.
GOBankingRates spoke to Rick Kuci, COO of FundKite, to get his insight into what a Trump win could mean for the younger generation.
Tax Cuts Could Lead To Short-Term Economic Growth
During Trump’s previous term, his administration rolled out major tax cuts with the Tax Cuts and Jobs Act of 2017. This legislation mainly favored the wealthy and corporations in that it lowered the top individual tax rate and reduced the corporate tax rate. It’s likely that similar measures would be implemented if he were to win another term. These tax cuts could have both positive and negative implications for Gen Z’s finances.
“If Trump wins the election, Gen Z’s finances could be influenced by continued tax cuts and deregulation aimed at business growth,” said Kuci. “This could create more job opportunities and lower unemployment.”
Corporate tax cuts might encourage businesses to expand, potentially creating more jobs and higher take-home pay for Gen Z.
But the long-term effects of tax cuts are important, too. If those cuts aren’t balanced out by reductions in government spending or an increase in economic growth, they could balloon the national debt. In this case, we’d probably see spending cuts in areas that could directly affect Gen Z, such as education, healthcare or social programs.
Also, as in Trump’s first term, these tax cuts will likely benefit higher-income individuals and corporations first. This exacerbates wealth inequality, making it tougher in the end for lower-class or middle-class Gen Zers to climb the economic ladder.
No More Student Loan Forgiveness
Forgiveness for student loans have arguably been one of the biggest impacts of Biden’s presidency. But Trump has expressed opposition to these initiatives, saying that Biden’s programs should be reversed.
“Trump’s policies on education funding contrast with Harris’s approach to student loan forgiveness,” said Kuci.”
If elected, Trump might roll back or significantly alter current student loan forgiveness programs. This would have an immediate impact for many in Gen Z who are either currently in college or are recent graduates. If you’re counting on your loans being forgiven, you may need to reassess and prepare yourself for higher long-term debt.
The end of student loan forgiveness could mean Gen Z graduates end up with higher debt loads for longer periods. This could mean delaying major life milestones such as homeownership, starting a family or saving for retirement. That debt burden could also influence career choices. You may feel pressured to prioritize a higher-paying job over a career you’re more passionate about to manage your student loan payments.
Of course, an end to student loan forgiveness could also influence decisions Gen Z makes about their education in the future. If you’re a student considering college, you might be more cautious about taking on student debt and consider more affordable education options, such as community colleges, trade schools or online degree programs.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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