News
2 Predictions for Gen Z’s Finances if Trump Wins the Election
manonallard/Getty Images
As we approach the upcoming US presidential election, there will be much speculation and debate about how a Trump victory would affect the country in many ways, not the least of which is economy. It’s difficult to predict the exact economic impact of any presidency. But looking at Trump’s past policies and current campaign promises can give us some insight into what might happen.
Check out: Trump Wants to Eliminate Income Taxes: 3 Items That Will Instantly Become More Expensive
Next: $10K or More in Debt? See If You Can Become Debt Free (For Less Than You Owe)
The fallout from this election will impact the finances of all Americans — and if you’re a member of Gen Z, that may be especially important. After all, you’re likely financially independent for the first time and navigating the early stages of your career. You should definitely be aware of how some potential scenarios could affect you.
GOBankingRates spoke with Rick Kuci, COO of Background kitto get your insight on what a Trump victory could mean for the younger generation.
Rich people know the best financial secrets. Learn how to copy them.
Tax cuts can lead to short-term economic growth
During Trump’s previous term, his administration rolled out major tax cuts with the Tax Cuts and Jobs Act of 2017. This legislation largely favored the wealthy and corporations, as it lowered the top individual tax rate and reduced the corporate tax rate. Similar measures are likely to be implemented if he were to win another term. These tax cuts could have both positive and negative implications for Gen Z’s finances.
“If Trump wins the election, Gen Z’s finances could be influenced by continued tax cuts and deregulation aimed at business growth,” Kuci said. “This could create more job opportunities and lower unemployment.”
Corporate tax cuts can encourage companies to expand, potentially creating more jobs and higher take-home pay for Gen Z.
But the long-term effects of tax cuts are also important. If these cuts are not balanced by reductions in government spending or an increase in economic growth, they could balloon the national debt. In that case, we would likely see spending cuts in areas that could directly affect Gen Z, such as education, health care, or social programs.
Furthermore, as in Trump’s first term, these tax cuts will likely benefit higher-income individuals and corporations first. This will exacerbate wealth inequality, ultimately making it harder for lower- and middle-class Gen Zers to climb the economic ladder.
View more: I’m an economist: Here’s my prediction for the housing market if Trump wins the election
No More Student Loan Forgiveness
Student loan forgiveness has arguably been one of the biggest impacts of Biden’s presidency. But Trump has voiced opposition to such initiatives, saying Biden’s programs should be rolled back.
The story continues
“Trump’s policies on education funding contrast with Harris’s approach to student loan forgiveness,” Kuci said.
If elected, Trump could reverse or significantly alter current student loan forgiveness programs. This would have an immediate impact on many Gen Zers who are currently in college or recent graduates. If you’re counting on having your loans forgiven, you may need to reevaluate and prepare for a larger debt burden in the long term.
The end of student loan forgiveness could mean that Gen Z graduates will end up with higher debt loads for longer periods of time. This could mean postponing important life milestones like buying a home, starting a family, or saving for retirement. This debt burden could also influence career choices. You may feel pressured to prioritize a higher-paying job over a career you’re more passionate about in order to manage your student loan payments.
Of course, the end of student loan forgiveness could also influence the decisions Gen Z makes about their education in the future. If you’re a student considering college, you may be more cautious about taking on student debt and consider more affordable education options like community colleges, technical schools, or online degree programs.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reporting on politically focused financial stories. You can find more coverage of this topic at GOBankingRates.com.
More from GOBankingRates
This article was originally published in GOBankingRates.com: I’m an Economist: 2 Predictions for Gen Z’s Finances if Trump Wins the Election