Trump Won the 2024 Election, Now What?
Audio version available here (2 min. 10 sec.)
After weeks of early voting and an eventful Election Day, Republican-nominee Donald Trump has officially won the presidency. When current-President Joe Biden leaves office this upcoming January, Trump will be sworn in as the 47th president of the United States. By the time the president-elect begins his second term, he will likely put many of his campaign promises into effect. What can you expect?
As several popular provisions of Trump’s first-term Tax Cuts and Jobs Act expire in 2025, and as he promised on the campaign trail, an early move he will likely make is securing permanent lower tax brackets and higher standard deductions, or at the very least, extend their expiration date. This move will require Congressional approval, but with a Republican Senate and currently-leading Republican House, there will likely not be a shortage of allies for Trump to pass measures with.
Another action many look forward to is Trump’s crusade on eliminating income taxes. While legislation this impactful could be difficult to secure, Trump’s effort to end taxation on wages earned from tips has support from both sides of the aisle, as Democratic-nominee Kamala Harris also expressed her intent to end taxes on tips if she won the election. Ever since he originally announced this proposal, Trump has expanded the elimination of income taxes towards overtime pay and Social Security benefits as well.
However, these and many other campaign promises he has made will not be cheap to implement. The Tax Cuts and Jobs Act alone added trillions of dollars to the federal debt. Severely reducing tax revenue with permanent tax breaks could spell trouble for the government. In response to concerns, Trump claims that his foreign policy should pay for his tax cuts. This includes hikes in tariffs. A universal tariff of up to 20% would be imposed on all goods imported to the United States from other nations. But special rates for certain countries like China and Mexico would be much higher. China would face a minimum 60% rate on all goods, while vehicles manufactured in Mexico and then shipped to the US would be hit with a 100% tariff. In theory, this will generate enough revenue to offset costly tax breaks.
Until Trump is back in office and begins taking action, we won’t know for sure how his second presidential term will affect the country’s economy. As his policy begins going into effect, it will be important for business owners to keep a close eye on their finances and have appropriate business plans for the next four years. Plan right with financial and tax experts by your side. XQ CPA’s experienced advisors are happy to give you the right guidance so you can thrive under the new president. Get in touch by giving us a call today.
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