Trump vs Biden On The Economy
Dear Rich Lifer,
Last week, President Trump and Democratic Nominee Joe Biden faced off in the first 2020 Presidential Debate.
There was a plethora of topics on the table, from healthcare to police reform to immigration to gun violence… The list goes on and on.
Yet, at the forefront of many of our minds is one key issue: the economy.
In fact, according to a poll from the Kaiser Family Foundation released earlier last month, registered voters ranked the economy as the most important issue in deciding their pick for president.
The coronavirus has devastated the economy with record unemployment, the closure of businesses, eviction crises, and exorbitant medical bills. Even further, The International Monetary Fund predicts U.S. economic output will drop 8% this year after 2.3% GDP growth last year.
The economy has always been a selling point for Trump’s reelection, but will he be able to convince the American people he is the man to bring the country back to its February highs?
Joe Biden argued that Trump’s mishandling of the coronavirus intensified its impact on an economy that was inequitable to begin with, and should be reimagined rather than rebuilt. But the question of whether we as a nation are ready for Biden’s America still remains to be seen. Click here to see what we mean…
But, whether you are staunchly pro-Trump, team Biden, or somewhere in the middle, today we will break down both candidates’ plans for the economy and how they will affect you.
The coronavirus pandemic is by no means defeated, and will likely affect Americans for months, if not years, to come. Here is what each candidate proposes to do to combat coronavirus and lift up the economy…
Trump has signed off on four coronavirus relief bills totaling almost $3 trillion in relief funding, but negotiations for another bill have been at an impasse—odds of a new bill being passed before the election look slim.
Trump has departed from other Republicans by urging the members of his party to back another stimulus bill with “much higher numbers.”
He has expressed openness for a $1.5 trillion proposal that calls for:
between $450 and $600 in enhanced federal unemployment benefits
more support for small businesses as well as state and local governments
and another round of direct payments.
He claims support for general health precautions, and he himself wears a mask in public, but his administration indicates a looser grip on the mandates wheel. He is vehemently against encroaching on Americans’ freedom, and that enforcing mask mandates and the like has proven unrealistic. Even in cities with mask mandates, you see people walking all around without them, so why make it a matter of law? (he might argue).
Joe Biden has released a seven-point plan to combat coronavirus which includes:
a nationwide mask mandate
ramping up PPE production
establishing a renewable fund for state and local governments
investing $25 billion in a vaccine manufacturing and distribution plan
fixing the country’s relationship with the World Health Organization (WHO)
and a stimulus and relief package of over $2 trillion with increased oversight.
Both Biden and Trump will have a hard time passing legislation if the House and Senate stay divided.
If Biden is elected, click here to see why we are predicting the likelihood of mandatory mask laws, harsh travel restrictions, and even federal GPS tracking…
Taxes and tax reform have also been hot-button issues, so let’s see what Trump and Biden have planned for our taxes…
Trump is promising to build on what many see as his biggest legislative victory—the 2017 Tax Cuts and Jobs Act (TCJA), which reduced the corporate tax rate from 35% to 21% and lowered most personal income tax brackets.
In regards to capital gains taxes (which is placed on profits from the sale of assets), Trump now wants to lower the top rate of those taxes from 23.8% to somewhere between 15% and 18.8%.
Trump also recently deferred the collection of payroll taxes, which began on September 1 and lasts until the end of the year. That puts a pause on taxes on the employee portion of Social Security, which is 6.2% per paycheck. He says he wants to make this cut permanent but would need congressional approval to do so.
The Penn Wharton Budget Model said they hadn’t analyzed Trump’s tax plan because his policy proposals were too vague to run this level of analysis.
Biden’s focus has been on raising taxes for wealthy Americans and big business. He wants to raise the top income tax rate back to 39.6% from 37% and the top corporate income tax rate to 28% from 21%. He plans to apply Social Security taxes to earnings above $400,000. Biden also intends to raise the corporate tax rate to 28%.
Additionally, he plans to increase the long-term capital gains tax rate from 23.8% to 39.6% for people with incomes over $1 million.
An analysis of most of the policies in Biden’s tax plan from the nonpartisan Penn Wharton Budget Model found that between 2021–2030, Biden’s plan would raise $3.375 trillion in additional tax revenue, increase spending by $5.37 trillion and decrease the federal debt by 6.1%.
Important to note, though: his goal is to relieve some of the burden on middle America—if your gross annual income is below $400k, his tax rate increases would appear to have little effect on your salaried bottom line. But, for any corporation owners and high-income salary earners, you will definitely feel Biden’s reforms.
Unemployment is at 8.4%, down from our nation’s recently record-breaking highs, and it will likely take years to lower the rate to pre-coronavirus levels. Whoever wins the election will have their work cut out for them when it comes to creating jobs.
In his first term, Trump relied on deregulation and lowering corporate taxes to encourage growth.
In fact, since being inaugurated in 2017, Trump’s policies have generated 6 million new jobs. And prior to the coronavirus pandemic, the nation’s unemployment rate fell to its lowest point in 50 years.
Trump has stated he will create 10 million new jobs in ten months during his second term and 1 million new small businesses. Trump’s idea to spur job creation is through a $2 trillion infrastructure bill.
Important to note, though: Trump has stated that income inequality is lowering, but The U.S. Census Bureau revealed income inequality hit a new peak in 2019.
Biden’s approach to creating jobs revolves around his plan to raise taxes on the wealthy and then use that money to upgrade the country’s infrastructure and shift to a clean-energy production, creating jobs in the process.
To help manufacturing, he plans to quadruple funding for the Manufacturing Extension Partnership and provide tax credits for investing in communities that experienced mass layoffs or the closure of a major government institution.
Biden also supports a $15 minimum wage.
These are only a few of the key factors involved in getting the economy back on track. If you are interested in finding out more specifics on each candidate’s plans check out their website.
You can find Trump’s details of his first term if you click here.
And for Joe Biden’s plan for his potential Presidency, click here.
To a Richer Life,
The Rich Life Roadmap Team