President-Elect Trump and the Republican-controlled U.S. Senate (and possibly the U.S. House of Representatives) have a mandate from the American people to ease the affordability crisis.

In exit polls, 75% of voters said that inflation caused them moderate or severe financial difficulty over the past year. The economy was the second most important issue in voters deciding who should be president.

President Trump ran on a platform of cutting taxes, deregulation, and targeted tariffs. Various analyses suggest that some of these proposals are pro-growth and will reduce costs, while others may worsen the national debt and hike the prices that consumers pay.

Let’s look at what five policy areas will mean for your wallet:  

  1. Tax cuts – One of President Trump’s top agenda items to tackle early next year will be extending expiring provisions of the 2017 tax cuts that he and a Republican-led Congress passed. Most of the corporate tax changes were made permanent, so the focus will be on small businesses and individual taxes. He has vowed to make permanent the reduced income tax rates that lowered taxes for 80% of taxpayers and a higher standard deduction. This is critical. If these tax cuts are not made permanent, households will get a tax increase starting in 2026.

    President Trump has also vowed on the campaign trail to build on the expiring tax cuts by eliminating taxes on tips, overtime, and Social Security benefits. These would also save households greatly each paycheck. The big question will be how these tax cuts will be paid for. President-elect Trump will once again work with Congress, which could extend the cuts temporarily to control costs or make some permanent.

  2. Child Tax Credit – As part of extending the 2017 tax cuts, the Trump Administration would extend or make permanent the expanded CTC that was doubled to $2,000 per child under 17. This is an area of bipartisan agreement. Democrats want an expanded credit as well, but have called for hiking it up to as much as $6,000 per child under one. In 2021, Democrats made the CTC fully refundable and paid out on a monthly basis, turning it into a backdoor universal basic income. 

    It’s safe to say that the CTC is likely to be expanded, but we caution conservatives not to warp it into a new UBI check.

  3. Student Loan Forgiveness – The Biden-Harris administration forgave more than $175 billion in student loans for more than 4.8 million Americans. Some proposals have been struck down, and others are being fought in court, such as the Saving on Valuable Education plan (SAVE), a path for debt relief easier for longtime borrowers and those with low balances. 

    President Trump has opposed Biden’s overreach in this area, saying in response to the Supreme Court that “President Biden is not allowed to wipe out hundreds and hundreds of billions, probably trillions, of dollars in student loan debt, which would have been very unfair to the millions and millions of people who have paid their debt through hard work and diligence.” Don’t expect him to continue student loan forgiveness programs, and he may look to end popular ones such as the public service plan.

    For taxpayers, ending Biden’s new unfunded student loan forgiveness efforts is a savings for taxpayers.

  4. Self-employment and Side Hustles – The Biden administration enacted new restrictions on which workers can be classified as independent contractors this year. It was a bid to boost unions by forcing mass reclassification of workers as unionizable employees. Independent contractors may be full-time self-employed professionals and freelancers or part-time gig workers. About a majority are women who value flexibility to balance work with other priorities, such as caregiving.
     
    Under the previous Trump administration, President Trump enacted simpler, more IC-friendly regulations that delivered certainty to self-employed Americans about their status under federal law. The new Biden rules inject new uncertainty and confusion, which could cause businesses increased labor costs and ICs lost incomes, flexibility, livelihoods, and their own businesses.

    We expect that the Trump administration will undo these regulations by either passing new regulations or pushing Congress to enact reforms. The ability to earn extra cash or primary income on one’s schedule is critical in this time of high prices.

  5. Eldercare Costs  – President Trump floated a new tax credit for family caregivers. This would help defray the costs for families providing caregiving for elderly family members. How this would be passed or details about who would qualify have not been provided. This might be part of the tax-cut extensions or provided later. While this would help some families, the question will be how it will be paid for.

IWF has championed another avenue to help families afford elder care. We believe that an au pair program for elderly care is one way to do so without burdening taxpayers. 

There are a host of other areas affecting household finances that the next administration may tackle, from Medicare to Social Security to health care.

Housing is an area that is also costly for households and in need of federal attention to drive local solutions such as permitting reform to spur a boom in home building and expanding accessory dwelling units.

American households need relief. We look forward to seeing how the administration works to make that happen.