Here’s how a Biden or Trump presidency would affect your personal finances

President Donald Trump and Joe Biden, his Democratic opponent in next week’s election, have broadly diverging views on issues that would impact the personal finances of everyday Americans.  

It’s no guarantee the candidates’ ideas and proposals will eventually become law. Much hinges on the outcome of congressional races, for example.

But here are things to consider as voters head to the polls on Tuesday, on issues like taxes, Social Security, student loans and Medicare.

The Trump campaign said it would “cut taxes to boost take-home pay and keep jobs in America.” It offers scarce details on how this would be accomplished.

Experts believe the president would try to build on the Tax Cuts and Jobs Act, viewed as his signature legislative achievement during his first term.

The law, enacted in 2017, overhauled the tax code for individuals and businesses. It roughly doubled the standard deduction and limited some itemized deductions (like one for state and local taxes), among other things.

More from Personal Finance:
Here’s a decade-by-decade guide to retirement planning
What a Trump or Biden plan will mean to student loan borrowers
Older workers are struggling to find jobs

On average, the law cut taxes for Americans across all income groups, according to a report published by the Joint Committee on Taxation last year.

The richest Americans pocketed most of the benefit. About 76% of the estimated $259 billion in taxpayers’ total savings in 2019 went to those making more than $100,000 a year, according to the report.

However, the bill’s tax cuts for individuals are temporary. They are set to expire after 2025 and revert back to prior law, effectively raising taxes.

The Trump administration would likely try to make these cuts permanent, tax experts said.

Doing so would raise after-tax income for all households, on average, delivering a 1.5% increase, according to the Urban-Brookings Tax Policy Center. The top 20% of Americans (making roughly $167,000) would get about two-thirds of the benefit.

Trump administration officials like economic advisor Larry Kudlow have also floated the idea of a tax cut for the middle class. Trump has also proposed cutting taxes on capital gains (the top tax rate of which is currently 20%).

Biden, who was vice president during the Obama administration, has proposed raising taxes for wealthy Americans. He would seek to reduce taxes for lower earners via mechanisms like a temporary expansion of the child tax credit.

The Biden campaign floated a top income-tax rate of 39.6% (up from 37%) for those earning more than $400,000. He would raise their payroll taxes, too.

The Biden plan would also limit the value of itemized deductions (write-offs for charitable donations and medical costs, for example) for wealthy households making more than $400,000.

Biden would also increase taxes on capital gains to 39.6% for those making more than $1 million a year — almost double the current rate.

“That’s mega, mega significant. A lot of the ultra-high-net-worth people make a great deal of their income through investment income,” said Jeffrey Levine, director of advanced planning at Buckingham Wealth Partners.

The top 20% (those making more than roughly $160,000) would be the only group to see a tax increase in 2022, according to the Tax Policy Center. Their tax liability would grow by 5%, or $14,700, in 2022.

Meanwhile, Biden would boost the child tax credit to $3,000 for kids 17 and younger, plus a $600 bonus for children under 6. (The credit is currently $2,000 for kids under 17.) Biden would also make it fully refundable, meaning taxpayers would get a refund even if they owe no tax. (Up to $1,400 is currently refundable for each child.)

The bottom 20% of earners would see after-tax income grow by more than 5%, or roughly $750, in 2022.

Some observers believe low and middle-income taxpayers could see negative indirect effects from Biden’s proposal to increase the corporate tax rate, via increased prices for consumer goods or stagnating wages for employees.

Biden’s plan calls for boosting Social Security checks for individuals in many ways.

For example, his proposal would raise monthly payments for seniors who’ve been receiving benefits for at least 20 years, to protect against depleted retirement savings.

It would also set a minimum benefit — at least 125% of the poverty level — for those who’ve worked at least 30 years. Monthly survivor benefits for widows and widowers would grow by 20%.

Biden would also seek to improve Social Security’s finances.

Earlier this year, the Social Security Administration projected the trust funds that help pay benefits would run out in 2035. At that time, around 79% of promised benefits would be payable, funded exclusively by payroll taxes.

The unemployment crisis caused by the Covid-19 pandemic has sped up that timeline by a few years, according to some estimates.  

Biden would impose Social Security payroll taxes on high earners to improve the program’s solvency. Currently, workers pay 6.2% from wages, capped at wages up to $137,700 (which is indexed for inflation). Biden would also apply taxes to earnings over $400,000.  

Trump’s campaign agenda says he would “protect Social Security.” He’s tweeted messages of support for Social Security on many occasions and said he would “save” the program.

The president signed an executive measure in August creating a Social Security payroll tax holiday, between Sept. 1 and Dec. 31.

It’s a tax deferral, and workers would have to pay the tax back early next year. Businesses had to opt in. It only applied to workers making less than about $100,000 a year.

But Trump has floated forgiving that deferred tax.

“If I’m victorious on Nov. 3, I plan to forgive these taxes and make permanent cuts to the payroll tax,” Trump said.

A permanent payroll tax cut could deplete the Social Security trust funds by mid-2023, according to Stephen Goss, Social Security’s chief actuary.

Biden has proposed forgiving $10,000 in student debt for all borrowers.

He would also forgive federal student debt tied to undergraduate tuition at public colleges and historically Black colleges and universities. That would apply to borrowers earning less than $125,000 a year.

Trump hasn’t mentioned sweeping plans to forgive student loans. He’s called for eliminating public-service loan forgiveness, which allows certain not-for-profit and government employees to have federal student loans canceled after a decade of on-time payments.

Biden would keep that program but make changes, instead forgiving $10,000 a year of undergraduate or graduate student debt for up to five years.

The Trump administration has allowed borrowers to pause monthly student loan payments without interest accrual during the Covid-19 pandemic. The U.S. Department of Education initially offered that moratorium in March, and the president signed an executive measure over the summer extending that pause through 2020.

It’s unclear if that moratorium would be extended next year if Trump (or Biden) wins the election.

Trump has taken some steps to ease costs for Medicare beneficiaries and has proposed some changes to the senior health program.

For example, the president has moved to reduce drug costs, by lifting “gag orders” on pharmacists that prohibited them from telling patients there was a cheaper option for their prescriptions, for example. He capped monthly insulin costs, effective next year, for some Medicare beneficiaries.

Trump also wants to send $200 payment cards to some individuals on Medicare to help pay for drugs, he said in a speech last month.

The Trump administration is supporting a lawsuit seeking to overturn the Affordable Care Act. That law, known as Obamacare, made some changes to Medicare. For example, it added certain free preventive benefits to Medicare and eliminated, over several years, a spike in out-of-pocket spending on prescription drugs that some beneficiaries faced.

Biden has proposed some changes to Medicare, too.

His plan would allow individuals to enroll in Medicare starting at age 60 instead of 65. The program would cover dental, vision and hearing, all of which are currently excluded.

Biden also wants to reduce the cost of prescription drugs for Medicare beneficiaries by, for example, allowing the government to negotiate those prices — which is currently prohibited by law. He would prohibit most drug prices from rising faster than inflation.

His campaign also supports the Affordable Care Act.

— CNBC reporters Lorie Konish, Darla Mercado, Annie Nova and Sarah O’Brien contributed to this story.