With President-elect Trump’s recent win comes a lot of speculation on how he will live up to the many plans he has proposed. Since winning, Trump’s 100-day plan has been laid out with ten legislative measures he aims to pass during his first few months in office. Here’s an overview of those ten proposed measures and a closer look at the ones with direct financial implications.

An Overview of the 10 Proposed Legislative Measures

Middle Class Tax Relief and Simplification Act

Trump plans to reform income tax for Americans, giving special advantage to the middle class. His plan includes reducing the number of tax brackets from seven to three and simplifying IRS tax forms. It’ll also bring the top corporate tax rate down from 35% to 15%.

End the Offshoring Act

This legislative measure aims to protect American jobs from offshoring. Trump plans to implement taxes that discourage companies from moving their operations overseas and shipping their products back to the U.S. in order to save on labor costs.

American Energy and Infrastructure Act

Trump plans to fix inner cities and rebuild the country’s infrastructure (highways, hospitals, airports, schools, etc.). This plan, Trump says, will incentivize $1 trillion in investments and create millions of jobs for American workers.

School Choice and Education Opportunity Act

This act would localize education standards and eliminate Common Core, which sets K-12 education standards on a national level. It would also expand vocational and technical education, giving students more options for affordable education.

Repeal and Replace Obamacare Act

Trump plans to simultaneously repeal and replace the current national healthcare system. His provisions include: making health insurance an option and no longer mandatory for all individuals; allowing individuals to fully deduct health insurance premiums on their tax returns; and expanding the eligibility and usability of Health Savings Accounts.

Affordable Childcare and Eldercare Act

In this part of Trump’s plan, he aims to improve upon the current tax benefits by allowing parents to deduct dependent expenses “above-the-line.” He also wants to create tax-favored Dependent Care Savings Accounts, which operate much like Health Savings Accounts.

End Illegal Immigration Act

This act would make illegally entering the U.S. more difficult and create greater consequences for illegally reentering the U.S. after deportation. Some measures include constructing a wall on the country’s southern border and establishing a minimum federal prison sentence for those caught illegally reentering the U.S.

Restoring Community Safety Act

Trump plans to increase funding for local police training and increase resources for federal law enforcement agencies in an effort to decrease rates of crime, drugs, and violence.

Restoring National Security Act

This legislative measure aims to rebuild the country’s national defense by increasing the size of the Army, Navy, Air Force, and Marine Corps. Trump also plans to focus on cyber warfare and create state-of-the-art cyber defense and offense tactics.

Clean Up Corruption in Washington Act

Trump has set out several measures to attempt to reduce the corrupting influence in politics. Some examples include implementing a temporary hiring freeze on some federal employees and banning White House officials from lobbying on behalf of foreign governments.

Main Legislative Measures With Financial Implications

Among these ten proposed legislative measures, a few of them have direct financial implications that can affect your wallet. Here are four of them:

Middle Class Tax Relief and Simplification Act

The main change to take note of here is that the income tax brackets will be reduced from seven to just three. For reference, here are the 2016 income tax brackets. Starting in 2017, the income tax brackets and rates will be as follows:

Married-Joint Filers:                                                                 Single Filers:

Less than $75,000                                                 12%              Less than $37,000                                               12%

More than $75,000 (but less than $225,000)    25%              More than $37,000 (but less than $112,00)    25%

More than $225,000                                              33%              More than $112,500                                            33%

 

Under these changes, most taxpayers will be subject to a lower marginal income tax rate. The current capital gains rate will remain the same at a maximum of 20% for investments that have been sold after being held for at least one year. Standard deductions are increasing as well. The standards deductions for 2016 are currently $12,600 for a married couple filing jointly and $6,300 for single filers. Starting in 2017, the standard deductions will increase to $30,000 for married couples filing jointly and $15,000 for single filers. Between these changes, most people will likely experience savings in income taxes.

School Choice and Education Opportunity Act

So far, Trump’s education reform plan has laid out more details on changes to K-12 funding than it has on changes to higher education funding. On the K-12 level, Trump plans to re-prioritize existing federal dollars to expand school choice, which allows parents to choose which schooling option works best for their children regardless of price. On the higher education level, Trump has stated that he plans to work with Congress to ensure universities are making a good faith effort to reduce cost of attendance and that trade and vocational schools are a more accessible alternative to four-year universities.

Repeal and Replace Obamacare Act

First and foremost, Trump plans to make health insurance no longer mandatory. An individual could decide to remain uninsured without being hit with a tax penalty. Second, Trump plans to allow individuals to fully deduct health insurance premiums on their income tax returns, offering additional tax savings. Third, Trump plans to allow interstate sales of health insurance policies, encouraging competition among insurers, which should result in better prices for the consumer. Lastly, Trump plans to expand the eligibility and usability of Health Savings Accounts, making them an attractive option for people to contribute tax-free money that accumulates indefinitely for healthcare expenses for all family members.

Affordable Childcare and Eldercare Act

With the high cost of dependent care, it’s no wonder Trump made this a significant part of his legislative plan. Under the Affordable Childcare and Eldercare Act, Trump lays out three main pillars to reduce the cost of dependent care:

1. Guaranteed Paid Maternity Leave

Under the current Family and Medical Leave Act (FMLA), employers must provide 12 weeks of unpaid, job-protected leave to new mothers. Only about 11% of employers go beyond that and offer paid maternity leave. Trump plans to modify the existing unemployment insurance that all employers must carry in order to provide all new mothers with paid maternity leave. For women who work at companies that don’t offer paid maternity leave, they can receive pay under unemployment insurance during the first six weeks after birth or adoption. The pay will be equal to what they would receive if they were laid off; so it’ll be a fraction of their whole paycheck. This is a small step in the right direction considering the U.S. is the only industrialized country that doesn’t offer guaranteed paid maternity leave.

2. Childcare Tax Deductions

Trump will allow parents to write off childcare expenses as deductions “above-the-line” – meaning the deductions will count whether or not the parent chooses to itemize. For parents earning less than $500,000 if filing jointly ($250,000 if filing individually), eligible childcare expenses can be deducted for up to four dependents under the age 13. As an example, a family earning $70,0000 per year could see a reduction in taxes of $840 if it spends $7,000 on childcare. Stay-at-home parents will also quality for the childcare tax deduction, giving families more flexibility in how they determine which childcare scenario works best financially.

3. Dependent Care Savings Account

The last part of Trump’s childcare plan is the creation of the Dependent Care Savings Account (DCSA). This is a tax-favored account used for dependent care expenses. Dependents will be defined as children, disabled spouses, and elderly parents. Contributions to a DCSA are tax deductible. Income and capital gains in this account become tax-free as well when the money is used for eligible care expenses such as in-home nursing or babysitters. The maximum annual contribution limit will be $2,000 per year; and unused money can carry over year after year. Low-income parents will receive a government match of 50% of the first $1,000 contributed to a DCSA each year.

The Takeaway

President-elect Trump definitely set his bar high in his 100-day plan. Whether or not he will in fact deliver on these ten legislative measures depends largely on the cooperation of Congress. Some proposals may be easier to implement than others. We have our eyes peeled to see how the changes with financial implications will affect our wallets moving forward.

 

Be ready for Trump’s 100-day plan.  Get prepared and Book a Concierge Appointment with GuideVine.com today!


Aliyyah Camp

Aliyyah Camp

Aliyyah Camp is a personal finance writer. She has a Bachelor's Degree in Communication from the University of Pennsylvania. She blogs about ways to save money, make money, build credit, and invest on her website Rich And Happy Blog . When she's not writing about personal finance, you can find her reading a good book or going for a run. Follow Aliyyah Camp on Twitter.