Yahoo Finance Who Might Benefit Most From a Trump Economy?
On Wednesday, Nov. 6 — or shortly thereafter — millions of Americans will wake up to learn that their country elected a leader who will steer the country’s economy in a radically different direction than the other would if the outcome had been different.
If Donald Trump is the winner, you can expect a dramatic departure from the policies of the last four years — but who will benefit from those changes?
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GOBankingRates spoke with three experts — a business consultant, retirement planner and tax professional — who each bring a unique perspective to the discussion about the potential economic impact of a second Trump presidency.
Trump’s Commitment to Low Corporate Taxes and Deregulation Could Benefit Business Owners
Philip Wentworth Jr., is a 25-year entrepreneur and co-founder of Rockerbox Tax Solutions, which provides business management and finance consulting services to small business owners. The firm helps entrepreneurs streamline financial processes, implement wealth creation strategies and mitigate tax liabilities.
After 25 years of startup, technology and business management experience, Wentworth knows that for business owners, elections matter.
“I’ve garnered deep insights into how different economic policies impact our clients,” he said. “From this vantage point, a second Trump term could notably benefit entrepreneurs and small business owners due to the continuation of lower corporate tax rates and possible further deregulatory measures. Specifically, policies that reduce bureaucratic hurdles for small businesses can accelerate growth and spur innovation, areas where our clients have seen tangible benefits.”
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Trump’s Signature Achievement Was Business-Friendly Tax Cuts
Trump’s 2017 Tax Cuts and Jobs Act lowered taxes — and revenues — across the board, but the nonprofit, nonpartisan Brookings Institute concludes that the true winners were business owners and the wealthy.
If Trump wins a second term, he’s likely to continue or expand on some of the more corporate-friendly policies he instituted the first time around, which could be a boon for business owners.
“One area that’s been particularly advantageous for small business owners under similar economic policies is the enhanced ability to leverage tax strategies such as cost segregation and Section 179 deductions,” said Wentworth. “These strategies, which can significantly lower taxable income by accelerating depreciation on business assets, could become even more accessible or expansive under a second Trump term. This accessibility directly impacts small business owners’ bottom lines, enabling reinvestment into their operations and workforce.”
Deregulation and Corporate-Friendly Tax Cuts Are a Double-Edged Sword
Regulatory and tax policies are an economic see-saw — when too much preference is given to one side, the other can plummet to earth. Two examples are the cutting of necessary social programs to compensate for lost tax revenue or when too little regulatory oversight allows for preventable corporate malfeasance.
“The implications of these policies are nuanced,” said Wentworth. “For example, while entrepreneurs and small business owners stand to gain from specific tax advantages and deregulation, the broader socioeconomic impacts, such as on consumer spending and overall economic health, must also be considered. A robust economy benefits small businesses by increasing consumer spending, but changes in healthcare or social programs could have indirect impacts.”
A Wealth Advisor Thinks His Clients — Upper-Income Investors — Have the Most To Gain
David L. Blain, CFA, is the founder and CEO of BlueSky Wealth Advisors, a fee-only, independent registered investment advisor (RIA).
A speaker and writer whose commentary has appeared in some of the country’s most prominent publications, he is a member of the CFA Institute and the National Association of Personal Financial Advisors (NAPFA) and chairman of the Board of Directors of CarolinaEast Health System in New Bern, where he also chairs the Investment Committee. He previously served on the Board of Advisors and Finance Committee of the West Point Association of Graduates, as treasurer for Big Brothers Big Sisters of South Eastern North Carolina, president of the Cumberland Interfaith Hospitality Network and treasurer of Catholic Charities of the Diocese of Raleigh.
His background gives him unique insight into how political leadership can impact everyone from the wealthy clients whose wealth he guards to the down-and-out recipients of his charitable work.
If Trump emerges victorious this November, he expects the former to do better than the latter.
“Given my experience and the analysis we’ve conducted at BlueSky, a second Trump term could potentially favor investors and those in higher income brackets due to anticipated continued deregulations and tax policies favoring capital gains and corporate profits,” he said. “These groups have historically benefited from such policies, as they often lead to increased stock market performance and real estate valuation uptrends, areas where upper-income groups are more heavily invested.”
Average Earners Could Benefit, but They’ll Get Less and It Will Take Longer
Blain believes typical people with average incomes could benefit from a second Trump term, too, but that the effects are likely to be delayed, residual and muted.
“For the middle class, any benefits might hinge on broader economic growth leading to job creation and wage increases, though these effects could be more mixed and take longer to materialize,” he said.
But the gains for those at the top and in the middle might come at the expense of the most vulnerable Americans.
“Lower-income households and seniors could find themselves facing challenges if shifts toward deregulation lead to reductions in social support programs or changes to Medicare and Social Security, as has been debated,” said Blain. “Such demographic groups typically rely more on these types of governmental support structures, which could be altered or scaled back.”
The Rich — and Their Descendants — Will Probably Get Richer
Like Blain, John F. Pace, CPA, founder of Pace and Associates CPAs, works with well-heeled clients who benefited from Trump’s first term and probably will again if he’s reelected this fall.
“Throughout my extensive 40-year career in tax and estate planning, dealing with high-net-worth individuals and managing commercial properties and private foundations, I’ve witnessed how tax policies under various administrations affect different economic strata,” he said. “My experience as a family office executive for a Forbes 400 family and my role in overseeing a tax group at U.S. Trust, which prepared thousands of tax returns, has ingrained in me a deep understanding of the nuanced interplay between tax law and economic benefit.”
He thinks a second Trump term will likely bestow most of that benefit upon the investor class.
“I’ve observed that upper-class individuals and families often stand to gain the most from a Trump-led economic policy framework,” said Pace. “This demographic can leverage lower tax rates and favorable investment conditions to further solidify and grow their wealth.”
The Children of the Aristocracy Will Inherit More Wealth
Pace concurred with most of Blain’s points and the logic supporting them, but as a tax specialist, he expanded on the wealth advisor’s assessment to include the all-important ability of the wealthiest Americans to hand down their assets unimpeded.
“Estate planning under such a framework can often be more beneficial for these individuals due to potential relaxed regulations and tax advantages on wealth-transfer mechanisms,” said Pace.
He also shares Blain’s expectation that any benefit for average earners will be diluted and distant.
“Conversely, I have seen that middle-class families and small business owners may benefit indirectly through the trickle-down effects of increased investment in the economy and potentially lower individual tax rates, which could spur job creation and raise wages. However, the magnitude and distribution of these benefits can vary widely.
“The precise impacts on low-income households, seniors and other vulnerable groups are more complex. These groups may find themselves navigating a challenging landscape if reductions in social support programs and changes to healthcare come to pass. Based on the immense diversity of clients I’ve served, the critical takeaway is that economic policies are multifaceted, with varying implications depending on one’s place in the economic spectrum.”
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