Election promises that may fatten your wallet – or shrink it
Take them with a hefty grain of salt.
Article published: October 03, 2024
In this article:
- We’ve pulled together some of the major Democratic and Republican proposals that could affect your financial planning.
- Consider them as you cast a vote, but don’t do anything based on speculation or fear.
- Your financial planner will be here to help you understand and navigate any changes.
Heading into the final weeks of election season, the barrage of political ads, media coverage and heated discussions can get overwhelming. And you might be concerned about what it could all mean for your financial security.
While the candidates’ proposals are important to consider when deciding your vote, you should always approach political promises with some skepticism. Remember, candidates are focused on getting elected, one individual doesn’t have sole rulemaking authority and none of us know what the future holds for our country.
That said, the major-party presidential candidates have given us a sense of their priorities in a variety of financial planning-related areas. Here are some of the proposals as of this writing, drawn from their campaign platforms or websites, unless otherwise noted.
What the candidates have said about …
| Proposals | Harris (Democrat) | Trump (Republican) |
|---|---|---|
Taxes. The future of the 2017 Tax Cuts and Jobs Act is the biggest question, as most provisions are set to expire at the end of 2025. | The Democrats have said they’d roll back Trump's tax cuts for the wealthiest Americans but would ensure taxpayers making less than $400k don’t see a tax increase. The Democratic platform also pledges to increase capital gains taxes for millionaires and eliminate stepup in basis. The platform calls for a permanently expanded child tax credit, and Harris has proposed a $6,000 credit for newborns. Harris has also said she supports ending taxes on tips. | The Republican platform promises to make the TCJA permanent, including its higher standard deductions and lower tax brackets. The platform also proposes ending taxes on tips and calls for unspecified “additional tax cuts.” |
Social Security. Keeping it solvent past the next 10 years or so remains a primary voter concern, but no action has yet been taken by either party. | The Democrats would like to charge Social Security tax on higher incomes; currently, income over $168,600 isn’t subject to Social Security tax. The Democratic platform promises not to cut benefits. | In public remarks, Trump has said he’d make Social Security payments nontaxable for seniors although it’s not an official part of the platform. The Republican platform also promises no cuts to benefits or changes to retirement age. |
Health care. The biggest issues are the costs of health care and insurance coverage. | The Democratic platform promises to protect benefits and expand Medicare to cover dental, vision and hearing. The platform also pledges to make Medicare permanently solvent by making “the wealthy” pay more Medicare tax. Democrats plan to cap drug costs and out-of-pocket prescription expenses for everyone. The platform also calls for banning medical debt from appearing on credit reports. Democrats want to make expanded health insurance premium credits permanent. | The Republican platform calls for increased transparency, choice and competition for health care and prescription drugs. The platform additionally promises no cuts to Medicare or changes in qualification age. |
Student loans/education. Both parties are concerned by soaring costs. | Harris pledges to continue working to end the unreasonable burden of student loan debt. The Democratic platform promises to make community college and trade schools tuition-free. It also calls for continued expansion of Pell Grants for college. | In public remarks, Trump has been critical how the Biden administration has handled student loan forgiveness. The Republican platform prioritizes creating alternatives to four-year colleges. The platform also calls for “expanding 529s” but details aren’t specified. |
Interest rates. While interest rates are independently controlled by the Federal Reserve, they’ve become increasingly politicized. | Harris has said in public remarks that she would not interfere with decisions made by the Fed. | In public remarks, Trump has indicated he’d refuse to reappoint Fed Chairman Powell.He’s also said he believes he as president should have influence over rate decisions. |
Housing costs. Housing is consuming an increasing portion of American paychecks. | The Democratic platform includes new tax credits for first-time homebuyers and sellers. It also pushes landlords to cap year-over-year rent increases or lose tax breaks. | The Republican platform promises to increase housing affordability by lowering mortgage rates via lower inflation, construction on federal lands, support for first-time homebuyers and reduced regulation. |
Overall cost of living. Although inflation has waned, many people still feel the sting. | The Democratic platform says “lowering costs” is the No. 1 economic priority and promises to target price gouging and outlaw junk fees. It also calls for raising the federal minimum wage to $15. The platform also calls for permanently increasing federal child care funding and creating a national paid leave program, as well as free, universal preschool. | Republicans have made “defeating inflation” a key part of their platform, through means like cutting government spending, focusing on American energy sources and reducing regulation. |
The most important thing to know
This election will undoubtedly help to shape the future of the country. And ultimately, it may also affect your financial planning. But because there’s so much uncertainty, you shouldn’t make changes to your strategies now.
What should you do? First and foremost, the best reaction to these proposals – and to the complete platform of each candidate – is to exercise your right to vote for the candidate who best aligns with your vision and values.
Then, if it becomes necessary, the right time to update your strategies is when something actually changes.
Political promises should not keep you up at night.
Remember: Whatever happens, your financial planner will be here to help you understand any changes, navigate the impacts and adjust your strategies accordingly.
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