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What Today’s Presidential Election Will Mean for Your Wallet

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It's the moment everyone has been waiting for. In just a few hours, we'll know who the next president of the United States will be. The outcome of the election will certainly have an impact on your finances over the next four years. WalletHub's experts analyzed the financial impact of a Donald Trump or Hillary Clinton victory in two new reports. Here are some of the details about what you can expect under each candidate's potential presidency.

Your income taxes

Most Americans would see their personal income taxes decline under a Donald Trump presidency. I've written about Trump's tax plan before, but in a nutshell, he wants to consolidate the seven tax brackets we currently have into three (12%, 25%, and 33%) and do away with the 3.8% surtax on certain investment income. He also wants to more than double the standard deduction and eliminate the personal exemption and alternative minimum tax.

Wealthy families could particularly benefit under a Trump presidency, as his plan calls for elimination of the estate tax, which currently affects inherited assets valued at $5.45 million or higher.

On the other hand, not much will change for most Americans if Hillary Clinton wins. She wants to keep the seven tax brackets the same and add an additional 4% tax to incomes above $5 million -- effectively creating an eighth bracket for the super-rich. In addition, Clinton wants to reduce the estate tax threshold to $3.5 million and increase the top estate tax rate to 45% from 40% currently.

Clinton is also a big proponent of the so-called Buffett rule, which would ensure that no millionaire pays a lower tax rate than the middle class. She'll achieve this with the tax increases, as well as by capping itemized deductions and closing loopholes.

The stock market

While there's no way to accurately predict what will happen in the stock market, we can take a look at the history.

With a Republican president and a divided Congress, the S&P 500 has historically grown at a 3.28% annual rate. However, if Congress is Republican as well, the S&P 500's growth rate is a more impressive 16.36%.

Market performance under Democratic presidents has been significantly higher, which may come as a surprise, since Republicans are generally considered the more "investor-friendly" party. Even with a divided Congress, the S&P 500 has grown at a rate of 13.84% with a Democratic president. If Congress is Democratic as well, this rate jumps to 17.03%.

Employment

Hillary Clinton supports a $12 minimum wage in the U.S. and has several job-creation strategies she plans to implement as president. She plans to invest $125 billion in programs that will create jobs, such as youth employment programs, infrastructure investments, and affordable housing programs. The historical evidence says her plans could work; even with an entirely Republican Congress, the unemployment rate has dropped under Democratic presidents, on average.

Donald Trump is also calling for a higher minimum wage, but a less dramatic increase to $10. So either way, workers who make less than $10 per hour could get a raise. Instead of investing in job-creation programs, Trump plans to create jobs and boost wages through looser regulations, America-first trade policies, and his tax cuts, particularly on corporations. He has cited energy as a big driver of job growth during his presidency.

History is not on the Republicans' side, however. Unemployment has risen by about 0.2% with a Republican president, regardless of the makeup of Congress.

Education

Both Donald Trump and Hillary Clinton support charter schools to increase competition for students, which they hope will lead to better schools over time. However, that's where the similarity ends.

Hillary Clinton supports Common Core, unlike Trump, who has pledged to get rid of it. And while Clinton has a plan to make college tuition-free for working families and tackle the student debt problem, Trump has other ideas. Instead, he wants to pressure colleges -- especially those with large endowments -- to use more money for students and thereby reduce tuition costs.

Social Security

This is one of the few areas where the candidates agree, at least in principle. During a Clinton or Trump presidency, we can expect no increase in the full retirement age and no benefit cuts, despite the program's financial troubles.

The difference is how the candidates plan to fix the funding problem. Clinton plans to raise the payroll tax cap to $250,000 in wage income, about double the current amount, while Trump is relying on his tax plan to spark enough economic growth to fix the funding problem all by itself. So, under a Clinton presidency, high earners should expect to pay more Social Security tax. Under Trump's plan, no significant changes seem to be on the horizon.

Healthcare

Both candidates agree that the Affordable Care Act, also known as Obamacare, isn't perfect. Donald Trump wants to repeal the ACA altogether and replace it with a new plan requiring price transparency from healthcare providers, and allowing the sale of health insurance across state lines and tax deductions for health insurance premiums. However, as far as costs go, it's tough to put a number on what to expect under a Trump presidency.

Clinton has given us a few more numbers to work with. She wants to keep the ACA but acknowledges that costs have gotten out of hand. She wants to create a tax credit of $2,500 for individuals ($5,000 for families) to help pay for medical costs and require insurers to pay for at least three doctor's visits each year.

The bottom line

Keep in mind that these are all just plans at this point, and no president can do most of what is discussed here on his or her own. In other words, if Donald Trump wins, his tax cuts won't go into effect on Inauguration Day, nor will the Affordable Care Act be repealed overnight. The outcome of the House and Senate races will also play a big role in what you can expect over the next four years, so be sure to pay attention to the big picture, not just who wins the presidential election.

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