4 Ways Trump’s Economic Policies Could Be Good for Democrats’ Wallets, Too
Written by
Sean Bryant
Edited by
Chris Cluff
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With election primaries in full swing, a Donald Trump nomination might not be too far away. If you’re a Democrat, you may not be a big fan of Trump. However, there are a few ways that Trump’s economic and fiscal policy proposals could still benefit your wallet.
Keep reading as we look at some of Trump’s economic policies from his first term and what they might mean for Americans’ wallets if he’s elected again.
Continued Reduction in Taxes
The Tax Cuts and Jobs Act of 2017 was one of Trump’s biggest initiatives during his first term. However, many of those tax cuts are set to expire in 2025. He hasn’t spent much time campaigning about it; but, if Trump is reelected, it’s a safe bet that he will choose to extend many of the expiring tax breaks.
Many financial advisors believe his focus will be lowering individual tax rates and increasing the estate tax exemption. While this will undoubtedly benefit high-income earners, there also will be financial benefits for low-income and middle-class families.
“We’ve seen firsthand how these cuts can put more money in the pockets of everyday folks,” said Rhett Stubbendeck, founder of Leverage Planning. “For instance, imagine a family scoring a bit extra each paycheck, maybe using it for a home upgrade or tackling some debt.”
Stubbendeck went on to say, “Now, here’s the twist, in my opinion: It’s not just about red or blue ties. These policies can resonate beyond party lines. I’ve noticed at Leverage how, regardless of political labels, people appreciate having more financial breathing room. Democrats, just like anyone else, can vibe with that. It’s like finding common ground in unexpected places, and that’s what makes these economic moves intriguing.”
Cheaper Gas and Electricity Prices
Trump is a proponent of increasing domestic production of fossil fuels. He often quotes the slogan “Drill, baby, drill” to demonstrate this. Increased fossil fuel production within the U.S. likely would decrease U.S. energy and electricity costs.
Trump has said he plans to offer tax breaks for oil, gas and coal producers. He also plans to remove a significant amount of the Inflation Reduction Act, the largest climate measure in U.S. history.
The Inflation Reduction Act includes incentives for clean energy projects and the purchase of electric vehicles. However, oil, gas and coal production likely would increase if Trump reduced barriers and offered incentives. This would not be overly popular with many environmentally conscious people. However, Americans likely would feel this increase in supply when they paid less to fill up their cars or saw their energy bills decrease.
Trade
Trump has commented that a sign of weakness is when America exports less than it imports, causing a trade deficit. That’s why Trump supports imposing trade tariffs. He wants to institute a system with a 10% tax on most foreign goods.
On the campaign trail, Trump has made a stance that he wants to implement what he’s calling the “Trump Reciprocal Trade Act,” which would give the president authority to impose a reciprocal tariff on any country that imposes one on the U.S. If China or another country imposes a 100% tariff on the U.S., he wants to add an equal tariff for all goods on that country.
While these trade tariffs may raise the initial price of goods for consumers, the goal is to allow opportunities for domestic companies to compete. This could mean more jobs and boost the economy, especially for localities with manufacturing and other production facilities.
“If implemented, Trump’s plans to dramatically raise tariffs on imports to the U.S. are likely to drive up retail costs for the average U.S. consumer as well as cost of goods for U.S. manufacturers, many of whom source important components from overseas,” said Ben Johnston, COO at Kapitus. “However, such tariffs over time would likely help U.S. manufacturers prosper and expand their operations in the U.S., creating jobs and potentially a revival of U.S. manufacturing at large.”
Homelessness and Mental Illness
Trump wants to reinstate large mental institutions for those who are “severely mentally ill.” This ideally would take the mentally ill off the streets and decrease homelessness. Although it would cost taxpayers money to house people in these mental institutions, it may decrease costs for emergency rooms, where they’re treated with no health insurance. Trump aims to provide these individuals with the help they need and then reintegrate them into society.
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