Yahoo Finance 5 Ways a Biden Reelection Could Affect Your Finances If You Make Less Than $100,000 a Year
The 2024 presidential election is only a few months away, but political economists are already making their predictions for how the next president could affect the average American citizen or resident. If Joe Biden is elected for a second term, some of his proposed policies could have a positive impact on those who earn $100,000 or less a year.
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While it’s still too soon to say for sure what’ll happen come November, here are some ways a Biden reelection could affect your finances if you make less than six figures.
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Tax Policies Could Provide Financial Support
Whatever the outcome of the election, chances are the existing tax policies will be adjusted. Dennis Shirshikov, a finance professor at the City University of New York and head of growth at Summer, said that Biden could expand certain tax credits to help low- and middle-income households.
“The Child Tax Credit and Earned Income Tax Credit could provide significant financial relief for families earning less than $100,000 annually,” he said. In theory, this support could lower their overall tax burden, boost their disposable income and help reduce child poverty.
To qualify for the Earned Income Tax Credit in 2023, your household income had to be under $63,398. For 2023, your total investment income had to be under $11,000.
The Child Tax Credit has a much higher income limit of $200,000 for those filing individually (or $400,000 for those filing jointly). Those with higher incomes may receive a smaller credit.
Read More: I’m an Economist: Here Are My Predictions for Inflation If Biden Wins Again
Student Loans Could Be Further Reduced
Based on data from the Education Data Initiative, the total student loan debt within the U.S. is $1.753 trillion. Nearly 43 million borrowers have federal student loan debt. The average borrower owes $40,681, including federal and private student loans.
The topic of student loan forgiveness has been in the news for years now. Under the Biden-Harris administration, the total amount of forgiven student loan debt was $168.5 billion.
While not a guarantee, Shirshikov said a second term could mean more relief for borrowers still struggling with student loans — particularly those earning less than six figures a year.
Wages Could Continue To Increase
It’s no secret that wages haven’t kept up with inflation over the years. According to the Bureau of Labor Statistics, the average annual expenditure in 2022 — the latest data available — was $72,967, a 9% increase from the previous year.
In comparison, the average household income before taxes was $94,003 in 2022. When you factor in federal income taxes — and state income taxes for those who live in an area where they must pay them — many families already struggle to live a high quality of life.
But perhaps a greater concern is the low federal minimum wage, which is just $7.25 an hour — about $15,080 a year (gross) for those working full time. While many states have their own minimum wage laws, this is a significant burden for many people in America.
If Biden gets reelected, minimum wages could increase.
“There may be moves aimed at raising the federal minimum wage again on his reelection,” said Chuck Warren, host of the “Breaking Battlegrounds” podcast. The proposed federal minimum wage is $15 an hour — an improvement if nothing else.
Healthcare Could Become More Affordable
According to the Peter G. Peterson Foundation, the total U.S. healthcare spending in 2022 was $4.5 trillion. If broken down evenly across the population, that’s $13,493 per person.
In 2010, the Affordable Care Act was enacted to try to make healthcare more accessible to the average person. While costs are still exorbitantly high, a Biden reelection could potentially ease the financial burden a little.
“Biden’s health plan entails the expansion of ACA coverage to increase accessibility and affordability of healthcare services,” Warren said. Those earning less than $100,000 a year could benefit the most — especially if they qualify for low-cost marketplace plans.
Shirshikov seconded this, saying that Biden has spoken about expanding access to affordable healthcare, something that could lower out-of-pocket costs and premiums.
Housing Could Potentially Become More Affordable
“Making housing affordable is still a key concern,” Warren said. “Biden is proposing increasing the availability of low-cost homes as well as financial support for tenants and homeowners.”
Part of this entails prioritizing the construction of more affordable homes throughout the country. Under the Biden-Harris Housing Plan, the goal is to build 2 million new homes and provide up to $10,000 in mortgage relief to those who qualify — generally low and midrange income earners.
This increased housing supply could, in theory, help stabilize the rising costs of homes nationwide. The promise of increased financial assistance to first-time buyers — individuals and families alike — could also make it easier to achieve homeownership.
But that’s not all. For those who are worried about rising rental prices, there’s potential for relief.
In a recent announcement, Biden discussed the possibility of lowering the cost of rent in the country. If passed, his proposal would give corporate landlords one of two choices:
Put a rent cap increase of 5% on current rental units (per year)
Lose their federal tax breaks.
According to the Federal Trade Commission, rental prices across the country have gone up by 20% since 2020. Unfortunately, the tenants who are most impacted by this increase tend to be lower-income individuals. While a 5% rental cap might not solve the problem, it could slow it down while other measures are implemented.
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. For more coverage on this topic, please check out “5 Ways a Trump Win Could Affect Your Finances If You Make Less Than $100,000 a Year.”
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