What If Biden Wins? Expert Predictions for Your Wallet

Nov 24, 2021

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Nov 24, 2021

On Jan. 20, 2021, either Donald Trump will be reinaugurated or Democratic nominee Joe Biden will take his place. How would America change when it comes to taxes, health care, the minimum wage, COVID-19 and more if Biden wins the election and makes Trump a one-term president? In this report, WalletHub sought to answer that question, with a heavy emphasis on the financial consequences of a Biden presidency.

Below, you can see WalletHub’s full data and predictions on things like how the S&P 500 and unemployment rate would change with Joe Biden in charge. For each of our overall categories, we also sought out additional commentary from a panel of experts.

Area Of Interest	Projected Impact
Personal Taxes	Higher tax rate (39.6%) for people who make $400,000+.
Corporate Taxes	Increase the top corporate income tax rate to 28%.
Stock Market	Historically, the S&P 500 has grown at a 13.84% annual rate with a divided Congress.
Unemployment	Create 10 million clean energy jobs, spend $400 billion on "Buy American" initiative.
Education	+$1.9 trillion on pre-K, K-12 and higher education, triple Title I funding.
Social Security	12.4% Old-Age, Survivors, and Disability Insurance (OASDI) tax to earnings above $400,000.
Health Care	Expand ACA and introduce a public option.
Minimum Wage	Increase minimum wage ($15/hr.)
COVID-19 Response	Give Federal government primary responsibility for COVID-19 response.

Personal Taxes

Annual Income	Biden’s Proposed Tax Rate	Current Rate
Over $518,400	39.6%	37%
$400,001 - $518,400	39.6%	35%
$207,351-$518,400	35%	35%
$163,301-$207,350	32%	32%
$85,526-$163,300	24%	24%
$40,126-$85,525	22%	22%
$9,876 to $40,125	12%	12%
$0 to $9,875	10%	10%

Current Annual Tax Revenue: $3,706B
Projected Impact on Tax Revenue for 2021 (Biden): $199.7B

Other Notable Tax Policy Changes

Issue	Biden’s Stance
Estate Tax & Housing	Tax capital gains and dividends at the same rate as ordinary income for taxpayers with over $1 million in income. Tax unrealized capital gains at death. Refundable tax credit of up to $15,000 for first-time homebuyers. Renter's tax credit reducing rent and utility costs to 30% of income for low-income individuals. Expand the estate and gift tax by reducing the exemption amount to $3.5 million and increasing the top rate for the estate tax to 45 percent.
Caregiver Benefits	Create a $5,000 tax credit for "informal" caregivers—family members or other loved ones—providing long-term care to the elderly. Expand the Child and Dependent Care Tax Credit to $8,000 per child (up to $16,000), and increase the maximum reimbursement rate from 35% to 50%. Expand the Child Tax Credit $3,000 per child for children ages 6 to 17 and $3,600 for children under 6, fully refundable with no phase-in thresholds.
Itemized Deductions	Cap the tax benefit of itemized deductions to 28% of value for those earning over $400,000. Itemized deductions begin to phase out at taxable incomes over $400,000. Reactivate the Pease limitation for income above $400,000. Increase the generosity of the Low-Income Housing Tax Credit.
Retirement Accounts & Senior Citizens	Increase tax preferences for middle-income taxpayers’ contributions to 401(k) plans and individual retirement accounts. Increase tax benefits for elderly Americans who pay for long-term care insurance with their retirement savings. Provide automatic enrollment in IRAs for workers who do not have a pension or 401(k)-type plan. Extend the Earned Income Tax Credit (EITC) for workers age 65 and older without qualifying children.
Environment	Restore the full electric vehicle tax credit. Reinstate the solar investment tax credit. Tax breaks for energy efficiency in homes.
Labor	Enact the Paycheck Fairness Act. Make short-term compensation 100% federally funded and secure participation of all 50 U.S. states, DC, and territories.

Ask the Experts

Daraius Irani
Ph.D. – Vice President, Division of Strategic Partnerships and Applied Research – Towson University
Read More

Barry Bluestone
Russell B. and Andree B. Stearns Trustee Professor Emeritus – Northeastern University
Read More

Hamid Mohtadi
Professor of Economics – University of Wisconsin
Read More

David M. Primo
Ani and Mark Gabrellian Professor; Professor of Political Science and Business Administration – University of Rochester
Read More

Charles R. Hankla
Associate Professor of Political Science – Georgia State University
Read More

Benjamin S. Griffy
Assistant Professor of Economics, University at Albany, State University of New York
Read More

Corporate Taxes

Issue	Biden’s Stance
Corporate Tax Rate	Increase the top corporate income tax rate to 28%. 15% minimum tax on large corporations.
Taxation of Foreign Earnings	Double the tax rate on GILTI earned by foreign subsidiaries of U.S. firms to 21%. 10% surtax on corporations that ship jobs overseas. 10% “Made in America” tax credit to incentivize onshoring.
Environment	Additional tax credits for investments in electric vehicles, renewable energy, and energy-efficient technologies. Additional tax incentives for carbon capture, use, and storage. Eliminate tax preferences for fossil fuels.
Other Business Provisions	Establish a Manufacturing Communities Tax Credit for businesses that experience mass layoffs or the closure of a major government institution. Expand the New Markets Tax Credit and make it permanent. End pharmaceutical companies’ tax deduction for advertisement spending and tax incentives to move production overseas. Tax credits to small business for adopting workplace retirement savings plans. Eliminate certain tax preferences for the real estate industry.

Ask the Experts

Daraius Irani
Ph.D. – Vice President, Division of Strategic Partnerships and Applied Research – Towson University
Read More

Barry Bluestone
Russell B. and Andree B. Stearns Trustee Professor Emeritus – Northeastern University
Read More

Hamid Mohtadi
Professor of Economics – University of Wisconsin
Read More

David M. Primo
Ani and Mark Gabrellian Professor; Professor of Political Science and Business Administration – University of Rochester
Read More

Charles R. Hankla
Associate Professor of Political Science – Georgia State University
Read More

Benjamin S. Griffy
Assistant Professor of Economics, University at Albany, State University of New York
Read More

Stock Market

Historical Performance of His Democratic Predecessors

Historically, the S&P 500 has grown at a 13.84% annual rate with a Democratic president and a divided Congress.
The S&P 500 has grown at a 10.26% annual rate with a Democratic president and a Democratic Congress.

Ask the Experts

Daraius Irani
Ph.D. – Vice President, Division of Strategic Partnerships and Applied Research – Towson University
Read More

Barry Bluestone
Russell B. and Andree B. Stearns Trustee Professor Emeritus – Northeastern University
Read More

Hamid Mohtadi
Professor of Economics – University of Wisconsin
Read More

David M. Primo
Ani and Mark Gabrellian Professor; Professor of Political Science and Business Administration – University of Rochester
Read More

Charles R. Hankla
Associate Professor of Political Science – Georgia State University
Read More

Benjamin S. Griffy
Assistant Professor of Economics, University at Albany, State University of New York
Read More

Unemployment

Issue	Biden's Stance
"Buy American”	S400 billion increase in government purchasing of U.S.-based goods and services. $300 billion in new research and development in U.S. technology. Tighten current “Buy American” laws. Create 10 million clean energy jobs.
Government Spending	+$7.3 trillion spent over the next decade on infrastructure, education, and the social safety net.
Projected Economic Impact (Democratic Sweep)	+18.6 million jobs. 4.1% unemployment rate in 2024.

Historical Performance of His Democratic Predecessors

Historically, the unemployment rate has decreased by an average of 0.85 percentage points with a Democratic president and divided Congress.
The unemployment rate has decreased by an average of 0.16 percentage points with a Democratic president and a Democratic Congress.

Ask the Experts

Daraius Irani
Ph.D. – Vice President, Division of Strategic Partnerships and Applied Research – Towson University
Read More

Barry Bluestone
Russell B. and Andree B. Stearns Trustee Professor Emeritus – Northeastern University
Read More

Hamid Mohtadi
Professor of Economics – University of Wisconsin
Read More

David M. Primo
Ani and Mark Gabrellian Professor; Professor of Political Science and Business Administration – University of Rochester
Read More

Charles R. Hankla
Associate Professor of Political Science – Georgia State University
Read More

Benjamin S. Griffy
Assistant Professor of Economics, University at Albany, State University of New York
Read More

Education

Issue	Biden's Stance
Education Spending	+$1.9 trillion over 10 years on pre-K, K-12 and higher education. Triple Title I funding for public schools. Increase school teachers' wages. Eliminate the funding gap between white and non-white districts, and rich and poor districts.
Education Loans	Make attending a public college or university tuition-free for children in families with incomes of less than $125,000. Expansion of existing income-based repayment programs. Improve the Public Service Loan Forgiveness Program. Forgive student loan debt and exclude the forgiven amount from taxation.
Education Equality	Reinstate Department of Education guidance to support schools in legally pursuing desegregation strategies. Improve teacher diversity. School district grants for implementing strategies to diversify schools. Universal pre-K for 3- and 4-year-olds.
Charter Schools	Opposes Trump's conception of ‘school choice.’ Against using public money for private K-12 schools. Against for-profit and low-performing charter schools. Supports good charter schools and allowing students to pick among public schools.

Endorsements:

Biden won the endorsement of the two largest teachers’ unions: NEA and AFT.

Ask the Experts

Daraius Irani
Ph.D. – Vice President, Division of Strategic Partnerships and Applied Research – Towson University
Read More

Barry Bluestone
Russell B. and Andree B. Stearns Trustee Professor Emeritus – Northeastern University
Read More

Hamid Mohtadi
Professor of Economics – University of Wisconsin
Read More

David M. Primo
Ani and Mark Gabrellian Professor; Professor of Political Science and Business Administration – University of Rochester
Read More

Charles R. Hankla
Associate Professor of Political Science – Georgia State University
Read More

Benjamin S. Griffy
Assistant Professor of Economics, University at Albany, State University of New York
Read More

Social Security

Issue	Biden’s Stance
Social Spending	+$1.5 trillion over 10 years on various social programs.
Payroll Tax	Apply the 12.4% Old-Age, Survivors, and Disability Insurance (OASDI) tax to earnings above $400,000.
Cost-Of-Living Adjustments	Replace Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) with the Consumer Price Index for the Elderly (CPI-E).
Benefit Increases	Increase the special minimum monthly benefits to 125% of the federal poverty line for low-income workers. Increase payouts for long-lived recipients. Increase survivor benefits for widows and widowers by about 20% more per month. Eliminate benefit cuts for workers who are eligible for both Social Security and a separate pension.
Social Safety Net Effect (2021-2024)	+$367.8 billion

Ask the Experts

Daraius Irani
Ph.D. – Vice President, Division of Strategic Partnerships and Applied Research – Towson University
Read More

Barry Bluestone
Russell B. and Andree B. Stearns Trustee Professor Emeritus – Northeastern University
Read More

Hamid Mohtadi
Professor of Economics – University of Wisconsin
Read More

David M. Primo
Ani and Mark Gabrellian Professor; Professor of Political Science and Business Administration – University of Rochester
Read More

Charles R. Hankla
Associate Professor of Political Science – Georgia State University
Read More

Benjamin S. Griffy
Assistant Professor of Economics, University at Albany, State University of New York
Read More

Health Care

Issue	Biden’s Stance
Health Care Funding	+ $727.5 billion effect on federal budget deficit. Increase rural health and mental health funding.
Cost Reduction	Improve affordability of long-term care. Address the opioid crisis through flexible grants to states and localities. Allow drug negotiations and restrict launch prices. Limit drug price growth and further lower drug costs. Impose tax penalty on pharma companies that raise drug costs by more than the rate of inflation. End surprise medical billing.
ACA	Expand the Affordable Care Act and introduce a public option.
Coverage Expansion	Automatically enroll low-income individuals into premium-free coverage. Coverage Expansion Revenue Feedback. Eliminate the 400% income cap on tax credit eligibility and lower the limit on the cost of coverage to 8.5% of income.
Medicare	Lower the Medicare eligibility age from 65 to 60 years old.
Medicaid	Maintained in current form.

Ask the Experts

Daraius Irani
Ph.D. – Vice President, Division of Strategic Partnerships and Applied Research – Towson University
Read More

Barry Bluestone
Russell B. and Andree B. Stearns Trustee Professor Emeritus – Northeastern University
Read More

Hamid Mohtadi
Professor of Economics – University of Wisconsin
Read More

David M. Primo
Ani and Mark Gabrellian Professor; Professor of Political Science and Business Administration – University of Rochester
Read More

Charles R. Hankla
Associate Professor of Political Science – Georgia State University
Read More

Benjamin S. Griffy
Assistant Professor of Economics, University at Albany, State University of New York
Read More

Minimum Wage

Initiative	Current Minimum Wage	Biden's Proposed Minimum Wage	Raise's Effects on Taxpayers
Minimum Wage	$7.25	$15	1.3 million jobs lost

Currently, 29 states and D.C. have minimum wages above the federal minimum wage of $7.25 per hour: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, Ohio, Oregon, Rhode Island, South Dakota, Vermont, Washington and West Virginia.
California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York and Washington, D.C., have enacted laws to raise their minimum wage to $15 per hour in the coming years.
Five states have not adopted a state minimum wage: Alabama, Louisiana, Mississippi, South Carolina and Tennessee.

Ask the Experts

Daraius Irani
Ph.D. – Vice President, Division of Strategic Partnerships and Applied Research – Towson University
Read More

Barry Bluestone
Russell B. and Andree B. Stearns Trustee Professor Emeritus – Northeastern University
Read More

Hamid Mohtadi
Professor of Economics – University of Wisconsin
Read More

David M. Primo
Ani and Mark Gabrellian Professor; Professor of Political Science and Business Administration – University of Rochester
Read More

Charles R. Hankla
Associate Professor of Political Science – Georgia State University
Read More

Benjamin S. Griffy
Assistant Professor of Economics, University at Albany, State University of New York
Read More

COVID-19 Response

Issue	Biden’s Stance
Responsibility	Give federal government primary responsibility for COVID-19 response.
Support	Expand federal COVID relief to eliminate out-of-pocket costs for treatment, testing and prevention vaccines. Provide additional pay and PPE to essential workers. Expand unemployment insurance and sick or family leave. Reimburse employers for sick leave. Provide employer tax credit for COVID-19 health care costs.
Health Insurance Coverage During Pandemic	Cover COBRA with 100% premium subsidies during emergency. Reopen ACA enrollment for the uninsured. Increase Medicaid FMAP by at least 10%.
School Reopening	Reopen schools in-person only after sufficient reductions in community transmission.
WHO Engagement	Re-embrace international engagement and reverse decision to withdraw from WHO.

Sources: This report is based on WalletHub projections as well as data from Tax Foundation, the Urban-Brookings Tax Policy Center, Center on Budget and Policy Priorities, Moody’s Analytics, Kaiser Family Foundation, Biden For President, Deloitte Development LLC., The Kiplinger Washington Editors, National Conference of State Legislatures and news reports.

Questions & Answers(4 questions)

Editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. Please keep in mind that it is not a financial institution’s responsibility to ensure all posts and questions are answered.

Upvotes

I think the affordable care act will have a more complex impact than just being a net positive for all Americans making under $125K/yr.

Upvotes

What will happen if the presidency is reallocated to Trump

Upvotes

Can our grandchildren afford the debt Biden will create, especially when the interest rates go up and the carrying costs swamp the budget?

Upvotes

Being retired and receiving Social Security benefits is it better to vote for Biden or Trump

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