What a Biden Presidency Could Mean for Your Finances

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A far-reaching economic stimulus plan, affordable housing, and tax credits galore are just some of his proposals.

We're in the final stretch of the presidential race between Joe Biden and Donald Trump, all while the U.S. faces twin catastrophes: a global health crisis and a recession.

Americans have taken hard hits to their finances from unemployment and income loss to evictions and decimated savings accounts, and are largely focused on protecting their bottom lines and getting coronavirus relief. That's why it's important to cut through the election noise and focus on policy proposals.

Here's exactly how a Biden presidency could impact your wallet.

Tax increases for the 1% and a child-care tax credit of up to $8,000

Biden makes clear in his tax plan that no one making under $400,000 per year will pay more in taxes -- a statement that's been fact checked by the Washington Post. His plan calls for a number of tax credits that can save working class families thousands.

Here are some key points in Biden's tax plan:

  • Raise the top individual tax rate back to 39.6% (from the current 37%), which impacts individuals making over $518,400 per year or married individuals filing joint returns making over $622,050 per year.
  • Increase the capital gains tax for individuals who make more than $1 million.
  • Raise the corporate tax rate from 21% to 28%.
  • Offer up to $8,000 in tax credits for low-income and middle-class families with children to offset the cost of child care.
  • Expand access to healthcare tax credits for working class individuals so that no one has to spend more than 8.5% of their income on healthcare.
  • Extend up to $15,000 in tax credits to first-time homebuyers to help cover the cost of a down payment.
  • Create a $5,000 tax credit for informal caregivers to provide relief for Americans needing long-term care.

The Wall Street Journal and the American Enterprise Institute, a public policy think tank, recently analyzed Biden's tax plan and came up with estimates for how it would impact five hypothetical families. The first three families bring in over $1 million per year, and they all end up paying an effective tax rate that's 3% to 4% higher under Biden's proposal. However, a family with an annual income of $80,000 and one child sees no changes in their taxes under Biden's plan. A family with an annual income of $50,000 and one child is projected to gain $2,900 annually, thanks to Biden's child-care tax credit.

Coronavirus relief: extended crisis unemployment insurance, paid sick leave for all, and the possibility of additional stimulus checks

The next president will face the dual crisis of the coronavirus pandemic and a recession. Biden's plan focuses on supporting small businesses and local governments, providing relief to the unemployed and working class families, and making sure healthcare is accessible.

Below are some key points:

  • Send out another round of stimulus checks if necessary.
  • Extend coronavirus crisis unemployment benefits.
  • Support legislation to provide an additional $377 billion for small businesses.
  • Provide emergency paid sick leave to all, including gig workers, self-employed, domestic workers, and contractors.
  • Implement cost-free testing, treatment, and vaccines for COVID-19.
  • Increase Social Security checks by $200 per month for the duration of the crisis.
  • Offer federal student loan forgiveness of at least $10,000 per person.

Apart from supporting a comprehensive second stimulus bill, Biden wants to create a slew of new federal programs to provide financial help during the coronavirus. In addition to the ones listed above, he also wants to provide more federal aid to local, state, and tribal governments to help pull the U.S. economy out of the current recession. Additionally, Biden's running mate, Kamala Harris, introduced a bill to give Americans $2,000 per month for the duration of the crisis, though it remains to be seen whether Biden supports this proposal.

Biden doesn't want you spending more than 30% of your income on housing

Most of Biden's policy proposals focus on empowering the middle class while providing additional financial support to our country's most vulnerable. Some of the presidential candidate's other major plans address affordable housing, fixing Social Security, and revamping retirement savings plans.

For affordable housing, Biden's key proposals include:

  • Fully funding federal rental assistance programs and creating a renter's tax credit for low-income individuals who make too much to qualify for Section 8 vouchers, so that no one has to spend more than 30% of their income on housing.
  • Ending red-lining and discriminatory lending with a Homeowner and Renter Bill of Rights.
  • Establishing a $100 billion Affordable Housing Fund to build and update affordable housing across America.

Most personal finance experts recommend spending no more than 30% of your income on rent or mortgage payments, a feat which isn't possible for many Americans currently, particularly those living in major U.S. cities. Biden's plan aims to make sure that's achievable for everyone.

Biden has a long list of policies in mind that can impact your wallet. Apart from those mentioned here, he also wants to revitalize rural economies, lower the price of prescription drugs, restructure tax-advantaged retirement savings plans to make them more equitable, and provide additional Social Security funds to older beneficiaries and folks who spend at least 30 years in the workforce.

Read up on the plans presented by each of the presidential candidates, and remember: your vote counts, and affects your financial outlook, too.

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