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From ballot to bank account: How election results may impact your wallet

One financial expert warns of a potential ‘tax bomb’

ORLANDO, Fla. – President-elect Donald Trump’s economic strategies hold high expectations as he claimed a “powerful mandate” from the American people. His plans largely hinge on significant tax cuts, aggressive trade policies and actions aimed at revitalizing the economy through corporate incentives and personal tax relief.

According to CBS News exit polls, the economy was the top issue for Trump voters, with many feeling left behind by recent economic growth.

Jude Wilson, a certified wealth strategist at Centrus Financial Strategies, explained to News 6 that tax cuts for businesses may provide benefits for workers.

“Most people voted based on their pocketbook, on the economy,” he said, adding that while the economy has grown. “People haven’t really felt it.”

Wilson suggests that if corporations benefit from reduced taxes, they might reinvest in the workforce by hiring more employees, raising wages or supporting research and development.

The stock market has already responded positively to Trump’s victory, the Dow and S&P 500 have set new records as post-election optimism and another Federal Reserve cut drive a market surge.

Wilson acknowledged this trend, noting, “There’s a strong possibility that the stock market will continue to rise in the short term.” However, he urged caution, pointing out that the market’s volatility means that long-term strategies are crucial for investors.

One of Trump’s more ambitious proposals is a series of tariffs on imported goods. He has mentioned tariffs as high as 20% on non-American-made products and up to 60% on goods from China. Trump justified these measures by saying, “We’re going to turn it all around and we’re going to do it through taxation and tariffs.”

Wilson likened tariffs to a “double-edged sword,” explaining that while tariffs may boost domestic goods by making imports pricier, they also risk raising consumer prices on essentials like clothes, electronics and vehicles.

Wilson recommended that consumers consider any major purchases sooner rather than later, given the potential for price hikes on imported goods. Trump has portrayed tariffs as a tool to negotiate better trade deals, though opponents worry about the potential strain on household budgets if prices rise.

Another focal point of Trump’s economic vision is personal tax reform. He has proposed extending the 2017 individual tax cuts, with additional benefits like removing taxes on tips and adding credits for family caregivers. This initiative aims to alleviate middle-class financial pressure, but there’s concern about its long-term fiscal impact.

Wilson raised a red flag about the potential for increasing deficits, explaining that without a corresponding reduction in government spending, these cuts could increase the national debt — a scenario he described as “the tax bomb.”

Wilson elaborated, “The tax bomb is what we refer to as the US debt increasing, and at some point in time, you’re going to have to pay the piper.”

As debt grows, future governments might face difficult choices, such as hiking taxes or slashing public services to balance the budget. Wilson advises that individuals remain proactive in their financial planning, including exploring tax-diversified investment options like Roth IRAs or Roth 401(k)s to mitigate potential risk to your retirement in the future.

In the meantime, Americans will have to wait and see how Trump’s economic proposals play out, as their impact depends on which policies he prioritizes and can secure on Capitol Hill. With a Republican-controlled Senate and House of Representatives, Trump may have a better chance of advancing his economic agenda.

If you have a consumer or investment issue, email makeendsmeet@wkmg.com.


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