How Does Trump's Policy Proposals Effect Your Pocketbook?

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Earlier this summer, I wrote an article about not letting the political party in power effect your savings. In this article, I detailed the importance of making sure that you save money no matter the person in the White House. The President does not control your savings rate, but you do! 

You can read the entire article: Should the Political Party in Power Effect your Savings?

Dave Ramsey always states, "I can be skinny and rich, if I could just control the person in the mirror." That was the main point of my article. It's about you and nothing else. With this in mind, I still thought it would be good to post an article about the policies that Trump plans to implement and the effect on your income.

Jason Green Jr. is a freelance writer and he was willing to take on the research of this article. We may not have the same political views, but he did a lot of research that I thought was good to share with everyone. I hope you enjoy this article and don't be afraid to leave comments in the comments section. I even add in my own commentary throughout the article. - $eth

There is a major political divide in America. Democrats feel lost with President Trump and most Republicans are rejoicing to have the White House back. With Trump leading the free world, he has a major role in the policies that are adopted. Below are multiple policies and my commentary on how they will effect you.


Trump proposes the following items:

  • reduce the current seven tax brackets to three with 10%, 25%, and 35% tax rates
  • slash corporate tax rates to 15% from 35%
  • make child and dependent care affordable (allow a deduction of $2,000 per child)
  • double standard deductions

What I think: Though the income ranges for the new tax brackets are not yet disclosed, it’s clear that high-income earners would save a lot in taxes with the highest tax bracket of 39.6% reduced to 35%. However, the middle-class may not witness too much change (not much can be said unless the income ranges are revealed).  

Business owners would emerge as winners as they have to pay fewer taxes with a reduced tax rate of 15%. (This is a good thing, because it will keep businesses in America. Currently, our business tax is the highest in the world and causes businesses to leave the U.S. - $eth)

Again it’s a win win situation for the high-income earners as they can get more tax breaks by saving $2,000 for child and dependent care expenses. In comparison, it’s difficult for low-income families to keep aside $2,000 each year after meeting all other expenses. (This is a great benefit that can be offered to households. Childcare expenses are outrageous and a tax break is well deserved. As for lower income families, getting rid of debt and budgeting would allow them to find $2,000 to save each year for childcare expenses. - $eth)

With increased standard deductions, individual taxpayers (standard deductions increase from $6,300 to $12,600) and couples filing jointly would be able to maximize their income. Basically, couples won’t owe taxes on first $24,000 of their income. (Another great benefit! The less I send to the government, the better! - $eth).


Trump wants to make education affordable for all. For that, he wants to trim some programs and policies and welcome new ones. He wants include the new policies:

  • Increase funds for school choice
  • student loan borrowers could get their loans forgiven after 15 years (for undergraduate students) of continuous payment
  • student loan borrowers could get their loans forgiven after 30 years (for graduate students) of continuous payment.
  • dismantle the U.S. Department of Education to reduce federal intervention
  • make Pell Grants available all year round for low-income students (currently, one is available in the fall and one in the spring).
  •  recommended a 13.5% cut to education in his budget proposal for the fiscal year 2018. 

What I think: There may be a rise in the college costs for low-income graduates as the federal government would no longer subsidize the interest on student loans. (As a public school educator, I believe that we would do better to have less federal involvement in our public schools. Therefore, I like the idea of giving more power back to the states and local districts. For too long, the federal government has hurt the education of all students, because of their over reach into all schools. - $eth)


President Trump wants to put forward the best trade policy that’s fair towards the American workers. For that, he has plans to introduce trade protectionism to protect American workers by imposing a 35% tariff on imports. He aims to renegotiate NAFTA (North American Free Trade Agreement) and if it doesn’t provide workers of the nation a fair deal, he’ll give the notice to withdraw from this agreement. 

What I think: Trade protectionism would make the American consumers (and no one else) pay that extra 35% increase on import tariff, which raises the price of goods. (I personally agree with Jason on this point. The cost of goods to all American consumers will increase, because other countries will also impose tariffs on their goods. The policy of imposing tariffs is bad for America. - $eth)


Some changes in the retirement policy includes

  • employee contributions will increase by 1% every year for the following 6 years
  • cancellation of the COLA (cost-of-living adjustment) for the participants of current and future Federal Employee Retirement System (FERS)
  • a decrease by 0.5% of the COLA for Civil Service Retirement System (CSRS) participants.

What I think: These changes might reduce an employee’s take-home pay and delay current employees’ retirement. Alterations in the federal retirement system might save the country at least $149 billion in the coming 10 years. 


In his 2018 budget, Trump proposes to decrease HUD’s (U.S. Department of Housing and Urban Development) funding by $6.2 billion, provide a backbone to HUD’s critical functions, continue providing rental accommodation to 4.5 million households, and so on. 

Moreover, Trump’s budget calls for a reduction of more than $1 billion on “lower priority programs” like  HOME Investment Partnerships Program, Choice Neighborhoods, and the Self-Help Homeownership Opportunity Program. It also calls for discarding the Community Development Block Grant Program, which provides revenue to local community development activities such as affordable housing, anti-poverty programs, and infrastructure development.  

What I think: The decrease in HUD’s funding would affect poor and working class households negatively. The backing of HUD’s critical functions would provide self-sufficiency and rental assistance to low-income and vulnerable households and work-eligible families. 

By Jason Green Jr.


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