Every new presidential administration brings its own economic ideas and methods for achieving their goals. With a new change coming in just a couple of months, we can already start to see how the picture is shaping up. The 800-pound gorilla in the economy is, of course, inflation, and at the end of the day, inflation forces people to pay more for the same stuff. We need more money back in our pockets, or to have prices fall…or both! So, how is Trump 2.0 going to do that?
Here are Five Fast Facts on how the new Prez might affect inflation:
- 👷 The Little People - Trump has said he will work to extend his 2017 tax cuts, which are currently set to expire next year. Combined with his “no taxes on tips” and overtime proposals, this would put more money back in the pockets of around 93 million Americans. And many smiles on faces, no doubt.
- 🤔 Who Does It Help? - Some point out that these tax cuts will help the rich more than the poor, which could be true depending on the final details. But estimates suggest around $1,740 less taxes for families making $80k. Dunno about you, but we’ll gladly take that! Plus, when was the last time you saw poor people creating hundreds or thousands of jobs? Just sayin’...
- 🧒 For The Children - Trump has also pledged to increase the child tax credit from $2,000 up to $5,000. We’re having a hard time thinking about anyone who would oppose this, but stranger things have happened. Still, we like the idea, and assume you do, too!
- 🏢 Corporate Taxes - Another Trump proposal is to drop the corporate tax rate from the current 21% to 15%. This would encourage businesses to make more stuff in America, which creates more jobs and brings costs down.
- 🎲 Tricky Tariffs - Trump’s riskiest proposal is to raise tariffs on imports. Many economists believe this will actually increase prices on Americans and potentially push inflation higher, and that’s certainly possible. However, in his first term, Trump successfully used tariffs as a bargaining chip to open new markets in Asia for US exports, subvert digital service taxes on American companies coming from Europe, and more. Can he do it again?
🔥Bottom line: We think it’s safe to say that everyone wants to see more money back in their pockets, and for prices to come down, no matter who sits in the Oval Office. The interesting thing about this time is that we have a major shift in policy, so we may be able to see some major changes in the next few months. Will it be helpful for normal folks, or will it backfire? Will Congress contribute or cause problems? Time will tell, but here’s hoping our Paychecks stretch a little further in the near future. 🤞
Do you think Trump’s policies will help?
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