About 50% of Americans believe that the winner of the presidential election will affect their own finances, a recent survey from fintech company Empower found. And while the president can do a lot of things on their own — like invade a country or declare a state of emergency — their effect on the economy and the stock market is more nuanced.
The economy isn’t just one thing — it’s influenced by multiple different factors and components.
Here’s what the presidential candidates have said about the following topics that could affect American's finances:
Tariffs
One common political refrain is that the president can’t do anything without the support of Congress. And while that’s often true, there is a notable exception: tariffs.
A tariff is a tax on an imported good from another country, and federal law allows a president to impose them without Congress’ approval. Former President Donald Trump, who imposed several rounds of tariffs during his term, has said he will increase rates to stimulate American manufacturing, including a 60% tariff on all goods from China.
“This could be very harmful to the economy and would have a negative impact on the stock market,” said David Kass, clinical professor of finance at the Robert H. Smith School of Business at the University of Maryland.
When a country increases tariff rates, the cost difference is usually passed on to the consumer. This means higher prices for anything not made in America — which means most things.
“You're going to be poorer because everything you buy is going to be more expensive,” said Nicholas Creel, assistant professor of business law at Georgia College & State University.
Tax cuts
Major changes in the tax code await the next president, who will need support from Congress to make their plans a reality. Some cuts enacted by Trump in 2017 are set to end next year.
Trump says he wants to cut taxes again, with most of the benefits going to corporations and those outside the middle class.
“His economic tax plan would be a significant boon to the wealth of the top 5%,” Creel said. “Pretty much everybody else is not going to be better off in the short term, and almost everybody would be worse off in the long term.”
Vice President Kamala Harris may meet resistance with her proposal to keep the 2017 tax cuts for people earning up to $400,000 per year and raise rates for people who earn more.
Student loans
Can a president cancel student loan debt? In 2023, the Supreme Court struck down President Joe Biden's initiative to cancel debt for 40 million borrowers, saying the plan needed approval from Congress.
Trump has repeatedly said he wants to reduce spending on education, including less funding toward student loan relief programs. Harris is expected to continue efforts she and Biden have made to lower student loan debt, but analysts don't anticipate quick results.
“Any and all progress that has occurred would halt immediately under a Trump administration,” Creel said. “Under a Harris administration, it would trudge along. They’re still finding these piecemeal ways to go about it.”
Small businesses
Harris and Trump's proposals to help businesses would also need a friendly Congress.
Harris wants to encourage people to start businesses and plans to offer a $50,000 tax credit for new business owners — a huge bump from the current $5,000 tax credit. This may make it easier for small businesses to succeed, especially those without family backing or other support.
“Success rates should go up rather significantly for small businesses,” Creel said.
For larger businesses, Trump wants to offer additional tax cuts — possibly decreasing the corporate tax rate to 15%. He plans to pay for the cut by raising tariffs.
Kass said many Wall Street experts believe that a Harris administration — with higher corporate tax rates — will hurt companies. Because company profits are likely to decrease due to higher tax rates, stocks may take a tumble.
That's one reason why Kass says Wall Street seems to prefer a divided government — with one party in charge of the presidency and the other in charge of Congress.
“That seems to be almost the consensus coming out of Wall Street,” Kass said.
Congressional races matter
While it’s important to look at a president's policies and budgets, it’s also crucial to remember another important factor: which party takes the House and Senate.
“Much of the power that the president will have will depend on who controls Congress,” Kass said.
If Harris wins but has a Republican House and Senate, it will be hard for her to pass many of her ideas. The same would be true for Trump with a Democratic Congress.
