Without knowing the true motivation of a person, it’s hard to predict what anyone is going to do (especially politicians). Regardless of your opinion, Donald Trump is our new President and it would be foolish for us not to anticipate the legal measures that may impact us Millennials. Who knows what campaign promises he is or isn’t going to pursue, as political campaigns are nothing more than a national marketing campaign. The best information we have to date is the information his people released regarding the first 100 days. The plan is focused on tax cuts, health care, and term limits. Now, let’s see how that really effects us.
The specifics of Trump’s tax plan is still a little unclear. There’s been talk about moving corporate rates down to 15% and some recent news of some middle class breaks. I won’t speculate on what he will or won’t do, what I can say is that tax cuts in any fashion will effect Millennials. In my opinion, it will be in a positive way. According to the research at the Tax Foundation, there is one key finding I found particularly interesting:
- The United States has the third highest general top marginal corporate income tax rate in the world, at 38.92 percent. Due to the recent reduction in Chad’s corporate tax rate, the U.S. rate is exceeded only by the United Arab Emirates and Puerto Rico.
First, why discourage business from coming and staying in America by having top tier tax rates? Puerto Rico, having higher rates sure isn’t a great example of increasing tax revenue as their finances are in shambles. Second, business owners understand reinvestment. Tax cuts equal more cash for business. More cash equals reinvestment. Reinvestment equals jobs. They can very well translate into the opportunity Millennials were looking for as they came of age in the Great Recession.
This is a big one for Millennials. First of all, if tax cuts are successful at creating jobs, healthcare bills will become a less relevant issue as employer coverage will increase in such an event. Second, Trump’s passage of his replace and repeal of Obamacare must have some clear cut action to reduce medical bills. I can’t imagine it passes the Republican ruled House without this. This is all good news for your pocket. We’ll have to wait and see how they treat the 20 million people being covered by Obamacare at the moment. If this number is true, it’s highly unlikely they will get dropped and left in the dark. Republicans in Congress are not willing to suffer the political backlash that would come their way if they did.
Note on the 20 million: I’ve spent my whole adult life as an accountant, numbers can be so easily manipulated to support an agenda.
Currently, Obamacare has a mandate that kicks in at 50 employees. Sources have told me they’ve seen businesses intentionally hold up their hiring below fifty, in order to avoid this requirement. We can only wonder how many jobs have been stifled. The repeal of this mandate, as well as that of the individual, will be front and center during this debate.
Term limits are rarely talked about in the everyday political reporting. Just to clarify the expression, it means that there would be a limit on how many times you can be elected to serve as a member of Congress. The passage of such a measure would ensure that power is not held by the same people for a long period of time. Politicians are notorious for making decisions based on the effect on their reelection. Term limits are believed to be a way to minimize this factor. This should be an important issue for Millennials because their prime money making years will be highly dependent on the decisions of this administration. This may be the most challenging of these three issues for Donald to pass, as Congress themselves will have to vote on this. Mitch McConnell, Senate Majority Leader, has already expressed that it’s not on his agenda.
You may not be “into” politics but keeping your finger on it’s pulse may serve you well for your future decisions.