Yahoo Finance I’m a Financial Advisor: What a Biden Win in November Could Mean for the Middle Class
With the elections right around the corner, Americans will have to vote on Nov. 5 to decide if former President Donald Trump will be elected for a second term or President Joe Biden will continue to lead the country.
This isn’t an easy decision for voters because of the current state of the economy. For example, house prices and mortgage rates are higher than ever, making it almost impossible for homebuyers to purchase a new home. Additionally, inflation has made the prices of rent, gas and even groceries challenging for the average American. According to a recent study from Ipsos Polling, most Americans say that inflation and the economy are the most important issues determining who they will vote for in the next election.
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GOBankingRates spoke with Anthony DeLuca, CFP professional and expert contributor for Annuity.org, to learn what the middle class can expect moving forward if Biden is reelected this November.
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Healthcare
One major concern for over 80% of Americans is the cost of healthcare. Trump has not proposed any alternative healthcare plans. However, Biden has actively worked to improve the Affordable Care Act, making it even easier for anyone losing current access to Medicaid to sign up for an affordable healthcare plan. He also expanded the PACT Act, which made it easier for veterans to access healthcare, and signed the 2022 Inflation Reduction Act, which reduced the price of insulin to $35 per month.
If Biden is elected, voters can likely expect him to continue expanding these healthcare programs, making it easier for middle-class Americans to afford them. He has voiced that he wants to continue trying to lower the costs of most healthcare options for Americans, including prescription medications.
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Taxes
Taxes are always a hot topic during election season, especially since most Americans still benefit from the lower tax code that Trump implemented in 2017. The Tax Cuts and Jobs Act impacted tax brackets, lowering the amount that middle-class Americans had to pay. That is set to expire in 2025.
Biden has expressed that he wants to raise taxes on businesses and those who make more money but still wants to reduce the amount of taxes imposed on middle-class citizens. This might mean increasing the amount of the Child Tax Credit Americans could claim on their taxes.
However, since he has not explicitly mentioned renewing the benefits of the expiring lower tax code, middle-class Americans might face a much higher tax rate when they file their taxes for 2025. This could be challenging for Americans who are barely making ends meet.
Biden, if reelected, will most likely let the TCJA sunset,” said DeLuca. “Consequently, he will raise the personal income tax rate to 39.6% for individuals earning above $400K and increase corporate tax from 21% back to 28%. If you increase tax to the wealthy, who are generally the business owners, then price increases will fall back down to the consumer.”
Student Loan Debt
Biden had proposed a plan to forgive student loan debt. The plan included cutting monthly payments in half for undergraduate loans, completely forgiving up to $20,000 in loans for those who received Pell Grants, and forgiving loan balances after ten years of payments for those with balances of $12,000 or less.
Unfortunately, that plan hasn’t gained full support, and unless there are major changes to the bill, it’s unlikely Americans will see those changes in the next few years.
However, he may be able to enforce some of his original plans to make higher education more affordable and decrease the burden of student loans for future students, which would help middle-income households.
Inflation
Inflation is currently at 3.4%, more in line with the Fed’s target level than the 7% it hit in 2021. While this is a hot-topic issue for most Americans, it’s unlikely they’ll see a reduction in everyday spending. Biden has not voiced any plan of action to lower the inflation rate.
His focus on lowering taxes and student loan debt while increasing healthcare benefits would increase government spending. This could fuel additional inflation, and middle-class Americans may feel that it could impact the prices of essential items. However, his push to increase jobs, increase infrastructure and commit to green energy could help to decrease some of the impact.
“Based on what I’ve observed in the economy, I would say that Biden’s policies would truly have little impact, because shifting who foots the bill inevitably falls on the consumer,” said DeLuca. “What the Fed does regarding the Federal Fund Rate has just as much impact on the price of goods and borrowing power.”
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This article originally appeared on GOBankingRates.com: I’m a Financial Advisor: What a Biden Win in November Could Mean for the Middle Class
