Trump vs. Biden: 5 Ways the Next Election Could Impact Long-Term Finances for Gen Z
Written by
Chris Ozarowski
Edited by
Levi Leidy
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President Joe Biden and former President Donald Trump have publicly supported very different approaches to key issues for younger generations, including healthcare, taxes, student loans and Social Security. Here’s how these two presidential candidates may impact the finances of Gen Z, depending on who wins office in 2024.
1. Taxes
Donald Trump’s Position
During his presidency, Trump implemented significant tax cuts with the Tax Cuts and Jobs Act of 2017, which lowered tax rates for individuals and corporations. If reelected, Trump has signaled his intentions to further reduce taxes, which could mean more immediate disposable income for young workers but may also lead to reduced government revenues. This could impact public services and infrastructure improvements that benefit younger generations.
Joe Biden’s Position
Biden’s approach to taxes focuses on increasing tax obligations for high earners and corporations to fund social programs and reduce inequality. For Gen Z, this could mean slightly higher taxes for those entering higher-earning brackets but potentially more robust social services, which could balance out the cost increase in other areas of life, like healthcare and education.
While lower taxes might increase immediate disposable income, Biden’s focus on funding social programs could mean more robust safety nets and services. Younger generations may benefit more from higher tax rates since they have not yet reached their full earning potential.
2. Healthcare Costs
Donald Trump’s Position
Trump has been a vocal critic of the Affordable Care Act, and his administration made several attempts to repeal or undermine the act. A complete repeal or further undermining could lead to higher healthcare costs for young people, especially those with preexisting conditions, or those who benefit from remaining on their parents’ insurance until age 26 under the ACA.
Joe Biden’s Position
Biden supports expanding the ACA. During his 2020 campaign, he supported offering a public health insurance option similar to Medicare, which could decrease healthcare costs for Gen Z. However, he has not talked further about the public option since taking office, leading some to believe he has abandoned the concept.
Affordable healthcare can be crucial for young adults, especially as they transition off their parents’ insurance plans at age 26. More affordable healthcare can free up more of their income for savings and investments, contributing positively to their long-term financial health. Biden’s proposed expansion of the Affordable Care Act could mean more security and lower costs for Gen Z, while Trump’s policies could favor those in good health but risk higher costs for those with preexisting conditions.
3. Student Loans
Student loan debt is a major concern for many younger Americans. Biden’s proposals could relieve some of this burden, whereas Trump’s policies might mean higher repayments.
Donald Trump’s Position
In the past, Trump’s administration proposed significant changes to federal student loan programs, such as ending the Public Service Loan Forgiveness program, which forgives student loans for graduates who work in public service jobs for 10 years. These changes could mean Gen Z students will pay more over time for their education if they choose careers in public service.
Joe Biden’s Position
Biden’s administration initially extended the pause on federal student loan repayments and interest accrual, which had been in place due to the COVID-19 pandemic. Biden also proposed canceling $10,000 in student loan debt per borrower, targeting relief primarily at low- and middle-income individuals. However, this proposal faced challenges in Congress.
In June 2023, the Supreme Court struck down Biden’s plan to cancel $400 billion in student loans. The court ruled that the administration had overstepped its authority without explicit congressional approval. Following the Supreme Court decision, Biden announced new initiatives to offer student debt relief.
Biden’s new plans, if implemented, would:
- Cancel up to $20,000 in interest for all borrowers who have accrued or capitalized interest since entering repayment.
- Automatically cancel debt for borrowers eligible for loan forgiveness under income-driven repayment plans, such as the SAVE Plan, or Public Service Loan Forgiveness, but who are not currently enrolled in these programs.
- Cancel debt for borrowers with undergraduate loans who began repayment 20 or more years ago and for those with graduate school loans who started repayment at least 25 years ago.
- Cancel debt for borrowers previously enrolled in programs with low financial value.
- Cancel debt for borrowers experiencing hardships that prevent them from fully repaying their loans now or in the future.
4. Social Security
Social Security is a federal program that provides financial assistance to retirees, disabled individuals and survivors of deceased workers. It is funded through payroll taxes by the self-employed, employers and employees.
The Social Security fund faces long-term funding challenges. The 2023 Social Security Trustees Report projected that the combined trust funds could be depleted by 2033 if no changes are made. After that, tax income would cover only about 79% of scheduled benefits.
There is a growing concern about the fairness of the current state of the Social Security system. Younger workers are paying into the Social Security fund to support an aging population, but they might never receive Social Security benefits themselves.
Donald Trump’s Position
In the past, Trump has indicated that changes might need to be made to Social Security to ensure its long-term viability but has not proposed specific measures. Any cuts or alterations to Social Security could affect Gen Z’s confidence in the availability of these benefits by the time they retire.
Joe Biden’s Position
Biden has proposed increasing Social Security funding by raising taxes on high-income earners. This approach aims to keep Social Security solvent without reducing benefits. For Gen Z, this could reinforce the stability of Social Security for their future, potentially making it a reliable component of their retirement planning.
5. Environmental Policies and Job Opportunities
Donald Trump’s Position
Trump’s focus on deregulation in the energy sector, including reducing restrictions on fossil fuel production, might boost job creation in these industries. However, it might also slow the expansion of renewable energy sectors that many young people are passionate about.
Joe Biden’s Position
Biden’s emphasis on green energy and environmental conservation includes investing in renewable energy infrastructure. This focus could create job opportunities for Gen Z in emerging industries, which are expected to be significant growth areas in the decades ahead.
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