Will I be better off if Trump is elected? Experts analyze the effects on your wallet if he is re-elected

Americans are once again facing the prospect of a Trump presidency - but what does it mean for their finances? 

Money is shaping up to be a key issue in the election. A poll by Gallup found one-third of voters think economic problems are the most important issue facing the country. 

With inflation still hot and interest rates at a 22-year-high, household finances have been a contentious issue for Biden. By comparison, a recent study by CBS News and YouGov found nearly two-thirds of registered voters thought the economy under Trump were good.

Here DailyMail.com looks at what a second Trump term could mean for the average US household...

Americans are once again facing the prospect of a Trump presidency - but what does it mean for their finances?

With inflation still hot and interest rates at a 22-year-high, this is proving a weak point for Biden and a strength for Trump

Extension of the Tax Cuts and Jobs Act 2017 

Trump made sweeping changes to the tax landscape through the Tax Cuts and Jobs Act (TCJA) in 2017. 

This included lowering individual income tax rates, almost doubling the standard deduction and raising the federal estate tax exemption. It also slashed corporate income tax to 21 percent - its lowest level since 1993.

However, these cuts are due to expire on January 1, 2026 - a date dubbed by financial planners as 'Sunset day.'

Certified public accountant Tom Wheelwright said anybody with a 401(K) will be affected by rises to the corporate income tax 

As a result, income tax brackets could revert to pre-2017 levels - which were almost 3 percent higher. For example, the current highest tax bracket is 37 percent but this would rise to 39.5 percent if the act is not extended.

These cuts saved the average US household $1,600 each, according to estimates by the Tax Policy Center. 

Trump has not confirmed whether or not he will extend the TCJA and experts are divided over whether he will. A research note by Capital Economics said there is little 'scope' for Trump to be so generous.

However, financial planners told DailyMail.com they expected the former President to stick by his flagship policy. 

It is also possible Biden will extend many of the cuts however he has made it clear he plans to raise the corporate income tax to 28 percent. 

Certified public accountant Tom Wheelwright told DailyMail.com: 'The corporate income tax affects all small businesses and even anybody with a 401(K) because higher taxes will hurt companies' profitability and hit stocks as a result. 

'So anybody invested in the stock market will benefit from Trump sticking to low corporate income taxes.'

New Jersey financial planner Marissa Reale added: 'We have seen in the last few years that Biden is much less business-orientated than Trump. So it will be the small businesses who win if Trump is back in power.'

The act also doubled the lifetime estate tax deduction from the 2017 value of $5.49 million for individuals up to $11.18 million - and this has continued to increase in the years since.

Under current rules, an individual can transfer $12.92 million and a married couple can transfer $25.84 million to heirs before they are slapped with federal estate taxes. 

If the TCJA is axed, the exemption could be effectively halved, leaving an individual with a taxable estate worth more than approximately $7 million subject to federal estate taxes if they do not plan ahead. 

Rebound in inflation - and higher for longer interest rates 

Trump made international tariffs central to his first term and he is pledging to do the same again. 

Between 2017 and 2021, his administration implemented levies on China, Mexico and the European Union, among others. Biden has maintained some of those tariffs.

Speaking to CNBC on Monday, Trump told reporters: 'I'm a big believer in tariffs.'

He has proposed a baseline 10 percent tariff on all US imports and a levy of 60 percent or higher on Chinese goods.

The latest data puts the Fed in a sticky position over when to start cutting interest rates - which are currently at their highest level since 2001

Inflation rose slightly to 3.2 percent in February as prices were pushed up by housing costs and gas

However, researchers at Capital Economics warned this would only make goods more expensive for Americans - triggering a rebound in inflation. The annual rate of inflation was 3.2 percent in February, down from a high of 9.1 percent in June 2022. 

Rising prices will in turn keep interest rates high, having a knock-on effect on mortgages and credit card rates. Currently the Fed's benchmark funds rate is between 5.25 and 5.5 percent - its highest rate since 2001. 

The Capital Economics note said: 'His tariff proposals would probably trigger a rebound in inflation which could persuade the Federal Open Market Committee to raise interest rates.'

Dollar stronger for longer

An unexpected benefit of high interest rates is the fact they often strengthen the US dollar.

This is because higher yields attract investment from investors abroad seeking higher returns on bonds.

If, as experts predict, Trump's foreign tariff policies push up inflation and keep the Fed in its tightening cycle, then the dollar will stay 'stronger for longer' or 'even 'rise significantly,' Capital Economics said.  

Paxton Driscoll, from Florida Financial Advisors , said: 'From a financial perspective, I don't really see many ordinary people losing out from a Trump presidency'

Strong stock market 

No matter who wins the election, economists generally agree the stock market will remain strong.

The S&P 500 ended 2023 up 24 percent and on a record-high. These gains have been fueled by a boom in AI and tech stocks. 

The so-called 'Magnificent Seven' stocks - which include Meta, Google, Amazon and Tesla - saw their values soar 107 percent last year. 

Economists predict stocks will continue to increase this year regardless of who is in power. Capital Economics researchers said there were no risks associated with a Trump presidency 'significant enough to burst this bubble.'

Paxton Driscoll, from Florida Financial Advisors, said: 'From a financial perspective, I don't really see many ordinary people losing out from a Trump presidency.'