As the presidential race continues to heat up, one of the most common questions among Americans is how each presidential candidate's plans will affect their livelihood. While it's impossible to know for sure what the effects of their plans will be before they're put into action, there are certainly several key factors in which the two presidential candidates plans are assumed to have a large impact. In an effort to keep voters informed and invested in the direction of the country, here's a look at how each presidential candidate will likely affect the U.S. economy and financial markets.
Fewer Brackets or Greater Scrutiny?
Both Clinton and Trump have made claims that they will aim to simplify the tax code and make it more accessible to the average American. Of course, how they intend to proceed with this simplification varies considerably between the two candidates.
Although Clinton's tax reshaping efforts are primarily directed towards those making at least $1 million, there are still a few areas in which her plans will impact the average American. Specifically, Clinton has spoken of her interest in incorporating more complexity into how capital gains taxes are calculated. Previously, capital gains taxes were only calculated based on an income bracket. With Clinton's changes, capital gains will also be taxed based on how long they've been held by an investor.
Conversely, Trump seeks to simplify taxes by condensing the existing tax brackets into just a handful of income levels. In addition to simplifying how taxes are calculated, Trump would also increase the limit on deductions for both single and married people, and repeal a handful of existing taxes geared towards affecting the upper class.
Changing the Tax Code for Small Businesses
Of course, neither candidate has spoken at length on their interest in directly simplifying the tax code. The closest a candidate has come to speaking on this matter is through Trump's website, in which he outlines a plan to remove the need for most citizens to itemize aspects of their tax returns.
For her part, Clinton has referenced plans to target the tax code issues that many small businesses face. Although she doesn't intend to make it considerably more streamlined for the average American, it is her hope that small changes will have a more sustainable impact on the growth of businesses.
An Agreement on Child-Care
In their quest to simplify the tax code, both presidential candidates have come to agree on one issue: child-care tax breaks. Both candidates hope to provide more assistance to families by providing greater subsidies for increasing child-care costs.
Perhaps one of the most notable changes arising from the presidential election will be the way in which estate taxes are handled. For Trump's tax plan, he would completely repeal the estate tax. In addition, he would increase the amount from capital gains taxes, but offset this with subsidies for small businesses and farms.
By contrast, Clinton seeks to lower the minimum required for estate taxes, and is also interested in increasing the maximum percent gained from this tax. Interestingly, Clinton also agrees with Trump in removing certain aspects of the estate tax, which would again put a greater emphasis on capital gains taxes.
Putting It All Together
While some areas aren't going to be majorly affected by either candidate, such as social security, there are still some clear areas that could be seriously impacted by the election. It's for this reason that everyone should be paying close attention to the election, as whichever candidate wins could substantially change many fundamental areas of the economy.