What a Trump or Biden victory would mean for your money

November election could shape the way Americans save, spend money

President Trump and his Democratic opponent Joe Biden are running for election on radically different platforms, with diverging views on most hot-button issues, including ones that would impact the finances of everyday Americans.

Continue Reading Below

The outcome of the Nov. 3 election could shape the way Americans save and spend their money for the next four years.

Whichever candidate wins on Tuesday will take stewardship of the White House while the U.S. economy is still reeling from the coronavirus pandemic and more than 10 million workers are unemployed.

With just one day left for voters to cast their ballots, here's a closer look at where the candidates stand on some of the biggest financial issues, including taxes, student loans and Social Security.

Taxes

Biden has pledged to increase taxes on wealthy U.S. households, which he describes as anyone earning more than $400,000 annually.

HOW A BIDEN PRESIDENCY COULD CHANGE YOUR TAX BILL

That includes restoring the top individual tax rate to 39.6% from 37%, taxing capital gains as ordinary income, capping deductions for high earners, expanding the Earned Income Tax Credit for workers over the age of 65 and imposing the Social Security payroll tax on wages above $400,000.

Almost 80% of the tax increases backed by Biden would land on the top 1% of earners in the U.S., according to a projection from the Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania's Wharton School.

BIDEN PLEDGES TO HIKE TAXES ON AMERICANS EARNING MORE THAN $400K

Trump has not unveiled a specific tax agenda if he's reelected in November, but experts widely expect the president to codify changes made in the 2017 Tax Cuts and Jobs Act that are slated to sunset in 2025, including decreases to individual income taxes and extra deductions for business owners, if he wins a second term.

Estimates from the Urban-Brookings Tax Policy Center show that if those cuts are made permanent, it would reduce taxes by about $1.1 trillion through 2030.

Simply extending the individual and estate tax provisions in the legislation would reduce taxes, on average, by about $1,460 per household in 2026, according to the analysis. The reduction would be even more significant for wealthy Americans, as taxpayers in the top 0.1%  those earning more than $3.7 million annually  would receive an average cut of $71,000 in 2026.

Middle-income taxpayers, or those who earn between $52,500 and $92,900, would receive about $860, the study shows. The lowest-income households, which earn less than $26,300, would receive an average tax cut of $80.

Trump has pledged to continue lowering taxes if he defeats Biden on Nov. 3, a follow-up to the Tax Cuts and Jobs Act that's often referred to as "Tax Cuts 2.0."

TRUMP'S UNEMPLOYMENT EXTENSION: YOUR TOP QUESTIONS ANSWERED

Still, the Constitution gives Congress the power to set tax policy, so Biden and Trump's planned economic agenda may hinge on whether Democrats have a majority in both the House and Senate.

Social Security:

Trump's campaign agenda says he would "protect Social Security," a message that he repeats often on Twitter and during campaign rallies.

Over the summer, Trump signed an executive measure temporarily deferring the 6.2% payroll tax, which is used to fund Social Security, for workers earning less than $104,000 annually, or $4,000 biweekly, beginning Sept. 1 through the end of the year, at which point employers are obligated to start collecting back what is owed.

TRUMP HITS BIDEN ON RAISING MINIMUM WAGE: 'WE HAVE TO HELP SMALL BUSINESSES'

At the time, he pledged to "terminate" the tax so that workers are not required to pay back the money at a later point.

"If I'm victorious on Nov. 3, I plan to forgive these taxes and make permanent cuts to the payroll tax," Trump said. "I'm going to make them all permanent."

If Trump permanently eliminated the payroll tax and did not offer a replacement revenue source, the Social Security trust fund could be depleted by 2023, according to an analysis from the chief actuary of the Social Security Administration.

WHAT A TRUMP PAYROLL TAX DEFERRAL WOULD ACTUALLY MEAN FOR YOUR WALLET

A high-level White House official told Fox News there were no discussions about abolishing the tax. Instead, the official said the administration is pursuing a plan to forgive the taxes that were deferred this year as a result of the executive measure.

Biden, meanwhile, has promised to increase Social Security checks for Americans, including raising monthly payments for seniors who've been receiving benefits for at least 20 years. The former vice president would also set a minimum benefit – at least 125% of the poverty level – for those individuals who worked at least 30 years.

He would also seek to shore up the fund by installing a new tax on higher earners.

Under existing law, employees and employers split a 12.4% payroll tax on wages below an annual maximum (in 2020, it's $137,700). The levy, which shows up on paystubs as a FICA tax, is used to fund Social Security.

But Biden has pledged to subject wages above $400,000 to the 12.4% payroll tax, creating a so-called "donut hole" for earnings between $137,700 and $400,000, which would be exempt.

The Social Security Trust Fund could be depleted by 2031 as a result of the coronavirus pandemic and subsequent economic collapse, according to September projections by the Congressional Budget Office. The nonpartisan agency said in the report the Social Security fund could plunge from $2.8 trillion to $533 billion in 2030. It estimates the fund would run out the following year.

Minimum wage

Biden has vowed to raise the federal minimum wage to $15 per hour, even as small businesses struggle to recover from the coronavirus pandemic.

During the second and final presidential debate in Nashville, Biden said he supported raising the minimum wage to $15 per hour, and said the government would have to bail out small businesses still reeling from the virus-induced crisis.

Asked by moderator Kristen Welker whether he still supported hiking the minimum wage despite the challenges small businesses face, Biden said: “I do, because I think one of the things we're going to have to do, we're going to have to bail them out, too. We should be bailing them out now, those small businesses. You've got one in six of them going under. They're not going to be able to make it back.”

Trump, however, countered that raising the minimum wage could hurt business owners and their employees.

“How are you helping your small businesses when you’re forcing wages?” he asked. "What’s going to happen, and what’s been proven to happen, is when you do that, these small businesses fire many of their employees."

The federal minimum wage rate has remained at $7.25 per hour for the past decade.

Student loans

Biden has proposed forgiving $10,000 in student loan debt for all borrowers as part of a COVID-19 relief effort.

He also supports canceling federal student debt for individuals from undergraduate universities and private historically Black colleges and universities who are earning less than $125,000.

The Trump administration, meanwhile, has temporarily placed federal student loans into administrative forbearance as a coronavirus relief measure. In the longer term, Trump has proposed combining all income-driven plans into one option where borrowers would pay 12.5%. Undergraduate borrowers could see their debt forgiven after 15 years, while it would be 30 years for graduate borrowers.

GET FOX BUSINESS ON THE GO BY CLICKING HERE