Yahoo Finance I’m an Economist: What a Trump Win in November Means for the Upper Class
Former President Donald Trump is once again leading the Republican charge to reclaim the White House. As the campaign rhetoric intensifies, one group keeping a particularly close eye on the developments is the upper class. A Trump victory could potentially mean a wave of policy shifts that could profoundly impact their finances.
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To get their predictions, GOBankingRates spoke to Aaron Cirksena, founder and CEO of MDRN Capital, and David Kass, clinical professor of finance at the University of Maryland Robert H. Smith School of Business.
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Taxes
During Trump’s previous term, he delivered substantial tax relief to the wealthy. He lowered the tax rate for individuals in the highest tax bracket.
“Trump’s prior administration implemented significant tax cuts, notably with the Tax Cuts and Jobs Act of 2017, which benefited the wealthy and corporations by lowering the top individual tax rate and reducing the corporate tax rate. A similar approach might be expected if he were to win again,” Cirksena said.
Kass expects the TCJA, which is currently scheduled to expire at the end of 2025, to very likely be extended by a second Trump administration.
“This would result in the continuation of reduced taxes on individuals and corporations,” he said. “Not only would the reduced individual and corporate taxes be continued into 2026 and beyond benefiting the wealthy, but so would the $13.61 million estate and gift tax exemption that would otherwise be reduced to around $7 million.”
This would ultimately leave more disposable income in the hands of the upper class.
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The Stock Market
The performance of the stock market is an area the upper class will be watching carefully. Their investment portfolios and retirement accounts are often heavily tied to the ebb and flow of stocks, bonds and other assets.
“Trump’s policies have historically been viewed as pro-business, which can lead to bullish stock market reactions, at least in the short term,” Cirksena said.
Trump’s pro-business stance and deregulatory efforts during his previous term were largely embraced by Wall Street. If he won a second term, he could provide the upper class with a lot of latitude to expand their wealth, given the right investments.
“A second Trump administration would also have a far more relaxed antitrust policy than is in place in the Biden administration,” Kass said. “The very aggressive approach currently being led by Lina Khan at the Federal Trade Commission and Jonathan Kanter at the Justice Department would almost certainly be returned to the substantially less restrictive policies followed by both Republican and Democratic administrations over the past several decades. This, in turn, should result in a more favorable environment for the stock market in which the upper class is heavily invested.”
Under Trump’s administration, there was a concerted effort to roll back regulations such as environmental protections and financial oversight.
“A Trump administration might continue to push for deregulation across various sectors, including financial services, energy and healthcare,” Cirksena said. “This could benefit businesses in these sectors, particularly the higher earners in these organizations.”
Real Estate
A Trump victory could prove highly advantageous to those in the upper class who have significant real estate holdings.
“Trump’s policies have previously been favorable to the real estate industry, including maintaining or expanding deductions and tax benefits that favor real estate investors,” Cirksena said.
Trump’s background as a real estate mogul could be the motivation for policies tailored to benefit the industry. This could include increased tax deductions for mortgage interest, property taxes and depreciation — all of which would effectively reduce the cost of owning property. This would make real estate investments even more appealing to the wealthy.
“President Trump would also likely put pressure on the Federal Reserve to lower interest rates,” Kass said. “This should be very beneficial to financial assets such as stocks and to real estate, as lower interest rates are associated with higher prices. The upper class would disproportionately benefit financially from these lower rates.”
When interest rates go down, it becomes cheaper to borrow money from banks to buy real estate. Lower interest rates mean lower monthly mortgage payments, which means that real estate becomes a more attractive investment. This increased demand leads to rising prices and property values going up. As a result, any real estate the upper class is already invested in would become more valuable.
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This article originally appeared on GOBankingRates.com: I’m an Economist: What a Trump Win in November Means for the Upper Class
