Joe Biden is the 46th President of the United States, now what?
We already gave you the skinny on Trump and Biden’s promises from the campaign trail. Both candidates entered the election with lengthy to-do lists, and now the former VP will take his ideas to the Oval Office. But just how much he’ll be able to accomplish is still TBD. While Democrats were able to hold onto the House, who controls the Senate will come down to Georgia voters and two January runoff elections. Meanwhile, an ultra-conservative Supreme Court could also stand in the way of Biden’s plans. But despite all the uncertainty, we still know a lot more about what the next four years will bring than we did two weeks ago, and we can roughly project how Biden’s first term will influence your bottom line, from taxes to investments.
Controlling the pandemic tops Biden’s to-do list
Biden made it clear that curbing the spread of Covid-19 will be his top priority come January 20. He’s already assembled a task force of Covid-19 medical advisors, and Fauci can rest easy knowing his job is secure. Biden wants to spend $25 billion on vaccine production and distribution, while making Covid-19 vaccines and treatment free for all Americans and offering emergency sick leave to everyone who needs it. Meanwhile, key judges on the Supreme Court have signaled the Affordable Care Act is likely here to stay (at least for now), and 21.1 million Americans will keep their health insurance. Open enrollment is happening now, and plenty of subsidies are available to bring down the cost of monthly premiums.
Biden’s “Made in America” plan to “Build Back Better”
When it comes to alliteration, the Biden team has it down. But what can Americans expect from a Joe Biden aid package? More stimulus checks, extended unemployment benefits, and expanded Social Security are all on the table. The former VP even tweeted his support for canceling at least $10,000 of student debt to sweeten the deal for 45 million borrowers. And an aggressive stimulus package may just be the beginning. Biden wants to spend $7 trillion on healthcare, housing, education, and infrastructure to create 10 million clean-energy jobs. Plus, his “Made in America” plan will pour $300 billion into R&D and $400 billion into procurement to drive demand for American-made products and create 5 million new jobs in manufacturing.
Election results send stocks skyrocketing
Dems aren’t the only ones celebrating a win. The stock market shot up in the wake of the election and rose again on the heels of Pfizer’s positive vaccine news— with the S&P 500 picking up a 9% gain in just six days. The first rally happened as investors bet on a split election outcome, with Joe Biden becoming commander-in-chief and Republicans keeping control of the Senate. Dems have a history of losing in Georgia runoffs, so investors expect the trend to continue. And for businesses and investors, a divided government is like a dream come true. Biden’s more progressive policies (tax hikes and increased regulations) likely won’t pass in a Republican-controlled Senate, and with Biden in charge, late-night tweets won’t send the market into a tailspin. Investors hope a more predictable market and less stomach-churning volatility may be on the horizon — which is nice to hear when your retirement account is on the line.
How Biden’s tax plan could actually save you money
Biden ran a campaign calling for higher taxes on corporations, capital gains, and the super rich. And while many people worried his tax plans would mean smaller paychecks for them, the president-elect was adamant that anyone earning less than $400,000 a year wouldn’t be affected (cue the memes). In fact, middle-income households could see a tax cut of around $680 and low-income households might owe $760 less. For top earners, Biden believes regular income and capital gains (income earned from investments) should be taxed at the same rate of 39.6%. That’s a 2.6% bump to the current top individual tax rate (37%) but just about doubles the current top long-term capital gains tax (20%). And while Biden’s tax policies will face a blockade if Republicans hold onto the Senate, there are some items that could earn bipartisan support. Republicans might agree to temporarily expand the child tax credit, properly fund the IRS, and even raise corporate taxes above 21%.