Depending on who you talk to, former President Donald Trump’s policies could be great or harmful to low-income families if reelected.
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“Trump’s first term achieved low inflation, record-low unemployment, and strong economic growth for all income levels, especially the poor,” said Kelly Ferguson, Director of Public Affairs for Proven Media Solutions.
Or not.
“Leading economists say Trump’s ideas would cause another explosion of inflation and hurt the middle class by extending his tax cuts, heaping another $5 trillion to the national debt,” said Janie McKenzie, a former political operative and public relations specialist at Ascendant Group.
GOBanking Rates reviewed Trump’s policies in several key areas. Here are five ways Trump’s second-term promises could affect the poor.
Jobs and Economy
Trump has pledged to reduce the corporate tax rate from the current 21% to 15%. However, critics said the tax cut primarily benefits higher-income households and wouldn’t provide substantial relief to low-income families.
While campaigning in Las Vegas, Trump promised to end income taxes on tipped wages for waitstaff and casino workers. The leisure and hospitality industry is the city’s largest employment sector, accounting for 32% of the workforce and nearly 36% of the city’s private employment.
Next: Trump Wants To Eliminate Income Taxes: Here’s What That Would Mean for the Economy and Your Wallet
Healthcare
The lack of access to affordable health care and preventable treatment often causes a cycle of poor health and financial instability for many families, including low-income families.
Trump has vowed to repeal the Affordable Care Act (ACA), commonly known as “Obamacare.”
The Affordable Care Act enabled many states to expand Medicaid eligibility, providing coverage to millions of low-income individuals. The Act also prohibits insurance companies from denying coverage based on pre-existing conditions.
However, some low-income families still can’t afford out-of-pocket costs even with government subsidies. The program’s complexity also makes it difficult for families to select appropriate plans and find preferred doctors and hospitals.
Trump has also promised to reinstate his previous executive order to ensure that the U.S. government pays the same price for pharmaceuticals.
This could lead to significant savings in healthcare costs. For low-income families, this means reducing prescription drug prices, increasing their ability to afford necessary medications, and less financial burden from high drug costs, allowing families to use the savings to address other critical needs.
Trade
According to the Bureau of Labor Statistics, the lowest 20% of income earners in the U.S. spend over 80% of their income on housing, food, transportation, and healthcare.
To lower the cost of goods, Trump proposed imposing the same tariffs on imported items as other countries impose on American goods. In addition, if reelected, he promised to levy a 60% tariff on all Chinese imports.
However, such trade policies could increase the price of items most people buy and disproportionately affect low-income families.
Education
About 52% of all public school students are eligible for free or reduced-price lunch, a chief indicator of a student’s income status.
Trump has proposed eliminating the federal Education Department. Instead, he recommended funding preferences and “favorable treatment” to schools that allow parents to elect principals, end tenure for K-12 teachers, implement merit pay to incentivize better teaching and reduce the number of school administrators, including those overseeing diversity, equity, and inclusion initiatives.
According to an Education Week report, Trump’s policies would eliminate an $18 billion federal fund that supports low-income students within a decade, scale back efforts to enforce civil rights laws in schools and provide federal special education funds with no strings attached. That money could be used for savings accounts for parents to pay for private school or other education expenses.
Energy
Trump is remembered for his iconic promise to reduce energy prices by increasing domestic production, “drill baby drill.” He also vowed to eliminate President Biden’s green energy subsidies and undo environmental regulations aimed at reducing greenhouse gas emissions.
Specifically, Trump plans to expedite federal drilling permits, speed up approvals for fracked gas pipelines, and allow fossil fuel extraction on more public land and water.
Energy prices could decrease in the short term due to the increased supply. However, the long-term effects could include price volatility due to market instability, which disproportionately affects low-income families because they spend more of their income on gas and other energy costs.
In addition, low-income households are more likely to live closer to industrial areas, making families more vulnerable to the health effects of air and water pollution and increasing their healthcare costs.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. For more coverage on this topic, please check out 5 Ways That a Kamala Harris Presidency Could Impact the Lower Middle Class.
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This article originally appeared on GOBankingRates.com: 5 Ways Trump’s Second-Term Promises Could Affect the Poor
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