The U.S. election on Tuesday will have far-reaching economic consequences, ranging from how Americans are taxed to how the country trades with the rest of the globe.
Democrat Kamala Harris and Republican Donald Trump present starkly different policy visions that will also shape the flow of immigrants into the labor market and make-up of the energy supply that powers industry. Their differences will influence the prices consumers pay for everyday goods and the borrowing costs households and businesses face on debts.
Much will depend not only on who wins the White House but also which party controls Congress. That’s especially so for tax proposals, which must be approved by lawmakers. Still, the president has independent authority to take sweeping actions, particularly on trade and immigration.
Donald Trump and Kamala Harris
Stephen Maturen/Getty Images and/Photographer: Stephen Maturen/Ge
Here’s a look at five of the most significant economic impacts of the election outcome.
Taxes
Trump has put lowering income taxes front and center of his campaign. He’s promised to extend tax cuts passed during his first term — otherwise set to expire at the end of next year — and also further reduce corporate income taxes. On the campaign trail, he’s embraced additional ideas for tax cuts, including ending taxation of tips, overtime pay and Social Security benefits. He claims the revenue loss would be partially offset with new tariffs on imported goods.
Harris has only committed to extending the 2017 Trump tax cuts for those earning less than $400,000 and says she would roll back the expiring tax cuts for the richest Americans. She has pledged to raise the corporate income tax rate and impose a minimum tax for billionaires. She would expand child tax credits for families and offer breaks for smaller businesses.
The impending expiration of the 2017 tax cuts likely forces action on tax legislation next year. Neither party wants to take responsibility for tax increases on the middle class, so tax policy will dominate Congress in the next session.
The make-up of Congress will be critical to the outcome. An election sweep in which the same party wins control of the presidency, Senate and House would clear the way for a partisan plan. But divided government would force a negotiated deal.
Trade
The biggest potential shock to business would come from Trump’s plan to sharply raise tariffs to try to force manufacturers to move production to the US. The Republican has called for minimum tariffs between 10% to 20% on all imported goods, rising to 60% or higher on imports from China.
Bloomberg Economics projects the maximal version of the plan, with the across-the-board tariff at 20%, would lower US GDP by 0.8% and add 4.3% to inflation by 2028 if China alone retaliates. If the rest of the world also retaliates, the blow to growth would be greater, lowering US GDP by 1.3%, but would add just 0.5% to inflation because of the weakened US economy.
Harris has signaled broad continuity with the trade policies of the Biden administration and also has warned Trump’s proposals would amount to a “national sales tax” on consumers.
Both candidates have said they would block a proposed Japanese takeover of United States Steel Corp., signaling a consensus on a hawkish attitude to foreign investment in sensitive sectors. The president has considerable unilateral authority to act on trade policy.
Immigration
Trump has promised the biggest deportation of unauthorized migrants in history, a move that would immediately hit sectors such as construction, hospitality and retail that rely heavily on immigrants — with both legal and illegal status in the country. Economists say such a move would jolt the labor market, disrupt business and cost billions of dollars to carry out.
Harris would take much more modest steps. She promised to re-introduce legislation clamping down on illegal border crossings, a policy that would require bipartisan support in the event of a divided Congress after the election. The president has wide-ranging powers on immigration.
Energy
Trump has adopted the motto “drill, baby, drill.” He promises to cut down on regulation of oil, natural gas and coal production and promises to make more federal land available for fossil fuel production, arguing that will bring down costs. The former president also says he will “terminate” Biden administration policies that offer subsidies to boost green energy production.
Harris leans into a clean-energy transition. The vice president has pledged to lower household energy costs but her agenda is committed to tackling the climate crisis through clean energy and protecting public lands.
Deficits
If either candidate has their way, U.S. budget deficits will go up, analysts say, but the jump would be nearly twice as big under Trump. Larger deficits typically mean higher interest rates and borrowing costs, for both households and businesses.
Harris’s campaign plans would increase the deficit by as much as a cumulative $3.95 trillion over a decade while Trump’s would drive up the deficit by as much as $7.75 trillion, according to estimates by the Committee for a Responsible Federal Budget, a nonpartisan fiscal watchdog group.
So far, investors appear sanguine on the outlook for U.S. fiscal policy regardless of who wins. Appetite for purchasing Treasury bonds has held up even as the U.S. annual deficit for the fiscal year ended Sept. 30 rose to $1.83 trillion from $1.7 trillion the previous year.
Still, some analysts warn that an unsustainable fiscal trajectory risks sparking market volatility. U.S. debt is already set to reach 99% of GDP this year. Bloomberg Economics estimates that Trump’s tax cuts could take it to 116% in 2028, and even under Harris’ more conservative proposals it would rise to 109%.
A divided government, in which the opposition party controls at least one chamber of Congress, could rein in deficits since Congress must approve both spending and taxes.
The National Treasury Employees Union, which represents workers at the Internal Revenue Service among 37 federal agencies and offices, has asked a federal judge for emergency relief to preserve the union rights of federal employees while NTEU’s legal challenge to President Trump’s executive order stripping unions of collective bargaining rights can be heard in court.
Trump signed an executive order last Thursday removing the requirements from employees at agencies including the Treasury Department that he deemed to have national security missions. On Monday, the NTEU filed a lawsuit to stop the move arguing that Trump’s rationale for protecting national security was just a way to end union protections for federal workers. The administration also wants to prevent the unions from collecting dues automatically withheld from employee paychecks.
“NTEU seeks emergency relief to protect itself and the workers it represents from this unlawful attempt to eliminate collective bargaining for some two-thirds of the federal workforce,” the request stated.
The NTEU contended that the Trump administration’s executive order claims that allowing workers to join a union was a threat to national security were absurd.
“We all know this has nothing to do with national security and that the true goal here is to make it easier to fire federal employees across government,” said NTEU national president Doreen Greenwald in a statement Friday. “Just five days after declaring the administration would no longer honor our contract with Health and Human Services, thousands of brilliant civil servants who work tirelessly to improve public health were let go for spurious reasons and little recourse to fight back.”
The union pointed out that Congress declared 47 years ago that collective bargaining in the federal sector was in the public’s interest by giving employees a voice in the workplace and allowing labor and management to work together. It acknowledged there is a narrow exemption in the law for groups of employees whose work directly impacts national security, but argued that Trump’s executive order is blatant retaliation against federal sector unions and ignores the laws passed by Congress creating the agencies.
In agencies where a reduction-in-force has been announced, NTEU’s contracts provide time for employees to respond to a RIF notice and explore alternatives to mitigate the impact of the layoffs.
Earlier this week, after two court rulings in California and Maryland, the IRS’s acting commissioner, Melanie Krause, announced the IRS would be bringing back approximately 7,000 probationary employees who had been fired and then put on paid administrative leave.
A bipartisan bill has been introduced in Congress to preserve collective bargaining rights for federal employees. The Protect America’s Workforce Act (H.R. 2550), sponsored by Rep. Jared Golden, D-Maine, and Brian Fitzpatrick, R-Pennsylvania, would overturn Trump’s executive order stripping collective bargaining rights from hundreds of thousands of federal workers at multiple agencies. Separately, eight House Republicans and every House and Senate Democrat have sent letters to the White House condemning the executive order.
The political calculus involved with the details of estate planning next year and beyond may be distracting financial advisors and clients from a larger, simpler conversation, one expert says.
On the off chance that the federal estate-tax exemption levels of $13.99 million for individuals (and double for couples) revert to half those amounts when Tax Cuts and Jobs Act provisions expire in 2026, only 0.2% of households would face potential duties upon transfer of assets, according to Ben Rizzuto, a wealth strategist with Janus Henderson Investors‘ Specialist Consulting Group. He predicted that most financial advisors and high net worth clients, such as those he works with and others across the industry, will see no changes.
With few other revenue-raising provisions available to President Donald Trump and Republican lawmakers, they’re not likely to shield all estates from payments to Uncle Sam — as much as they might like to play undertaker to the “Death of the Death Tax,” Rizzuto said, using the label for estate taxes adopted by critics favoring bills like the “Death Tax Repeal Act.” Lawmakers’ decisions on future exemptions from the taxes (and when they make those decisions) remain out of advisors’ control. Meanwhile, they must remind clients that estate planning is much more than having a will and avoiding taxes, Rizzuto said.
“For financial advisors and clients, I would expect for many of them not to have to worry about federal estate taxes next year,” he said in an interview. “Even though they may not have to worry about it, there are still a lot of good conversations to be had.”
Trust tools that reduce the value of the assets that will transfer to spouses or other beneficiaries upon a client’s death, combined with the available statistics about the shrinking share of estates subject to taxes, could bring some peace of mind to clients. The 2017 tax law itself pushed down estate tax liability as a percentage of gross domestic product to a quarter of its 2001 level, according to an analysis by the “Budget Model” of the University of Pennsylvania’s Wharton School. Just two years after the law’s passage, the number of taxable estates had plummeted to 1,275 — or 1% of the number at the beginning of the century.
At the same time, advisors could raise any number of questions with clients about their estates that involve varying degrees of expertise and collaboration with outside professionals. And many surveys have found that clients are expecting them to do so. For example, at least 70% out of a group of 10,000 adults contacted in January by WeAreTalker (formerly OnePoll) on behalf of online legal information service Trust & Will said advisors should offer estate planning. In addition, 40% of the group said they would switch to an advisor who provided that service.
“We’re seeing a fundamental shift in client expectations,” Trust & Will CEO Cody Barbo said in a statement. “The findings are clear. Advisors who fail to integrate estate planning into their practice aren’t just missing an opportunity; they are facing a threat to their client base as wealth transfers to younger generations over the next two decades.”
In that context, advisors and their clients should steer clear of trying to make sense of a complicated, ever-changing flow of news from Capitol Hill as Trump and the GOP pursue major tax legislation with a year-end deadline, Rizzuto said. If clients truly could be on the hook for estate taxes, a grantor retained annuity trust, a spousal lifetime access trust or gifting strategies may eliminate the possibility. One method involved with the latter could set them up in the future to receive stock that is “highly appreciated with lower basis,” Rizzuto noted, citing the example of equities that have gained a lot of value that a client could give to their parents.
“Why not gift them upstream?” Rizzuto said. “My father holds it. I tell him, ‘Dad, you have to do these things: Live for another 12 months, make sure you don’t sell, make sure that you update your will or your instructions to gift it back to me when you die.’ That’s another idea that we’ve been talking about with advisors.”
From another perspective, these possible paths forward may beckon to clients this year, if they are tuning into Beltway news about the progress of the tax legislation, he said. To bypass the risk of client perceptions that their advisor isn’t doing any tax planning at all, Washington’s complex maneuvering around the future rules is, “if nothing else,” a “great opportunity for advisors to bring this up at a very high level,” Rizzuto said.
“Advisors will really need to go back to basics and have some foundational conversations with clients,” he said, suggesting their goals with taxes as one key point of discussion. “‘What is it that we actually control within your financial and tax plan?’ When it comes right down to it, it’s really just incomes and deductions.”
As technology continues to automate routine tasks, the role of finance professionals is evolving, demanding deeper capabilities in critical thinking, communication and business acumen.
Many of PrimeGlobal’s North American firms are focused on cultivating these skills in their future leaders. Carla McCall, managing partner at AAFCPAs, Randy Nail, CEO of HoganTaylor, and Grassi managing partner Louis Grassi shared their views with PrimeGlobal CEO Steve Heathcote on the need for future leaders to balance technological proficiency with human-centered skills to thrive.
AI is transforming the sector by streamlining workflows, automating data analysis and reducing manual processes. However, rather than replacing accountants, AI is reshaping their roles, enabling them to focus on higher-value tasks. In the words of Louis Grassi, AI can be seen as a strategic partner, freeing accountants from routine tasks, enabling deeper engagement with clients, more thoughtful analysis, and ultimately better decision-making.
Nail emphasized the importance of embracing AI, warning that those who fail to adapt risk being replaced by professionals who leverage the technology more effectively. HoganTaylor’s “innovation sprint” generated over 100 ideas for AI integration, underscoring why a proactive approach to adopting new technologies is so necessary and valuable.
McCall advocates for an educational shift that equips professionals with the skills to interpret AI-generated insights. She stressed that accounting curricula of the future must evolve to incorporate advanced technology training, ensuring future accountants are well-versed in AI tools and data analytics. Moreover, simulation-based learning is becoming increasingly crucial as traditional methods of education become obsolete in the face of automation.
Talent development and leadership growth
As AI reshapes the profession, firms must rethink how they develop and nurture their future leaders. To attract and retain top talent, firms need to prioritize personalized development plans that align with individual career goals.
HoganTaylor’s approach to talent development integrates technical expertise with leadership and communication training. These initiatives ensure professionals are not only proficient in accounting principles but also equipped to lead teams and navigate complex client interactions.
Nail underscored the growing importance of writing and presentation skills, as AI will handle routine tasks, leaving professionals to focus on higher-level analytical and decision-making responsibilities.
Soft skills are the success skills
While technical proficiency remains vital, future leaders must also cultivate critical thinking, communication and adaptability — skills McCall refers to as the “success skills.” McCall highlights the necessity of business acumen and analytical communication, essential for interpreting data, advising clients and making strategic decisions.
Recognizing teamwork and collaboration remain crucial in the hybrid work environment, McCall explained in detail how AAFCPA fosters collaboration through structured remote engagement strategies such as “intentional office time,” alcove sessions and stand-up meetings. Similarly, HoganTaylor supports remote teams by offering training for career advisors to ensure effective mentorship and engagement in a dispersed workforce.
McCall emphasized why global experience can be valuable in leadership development. Exposure to diverse markets and accounting practices enhances professionals’ adaptability and broadens their perspectives, preparing them for leadership roles in an increasingly interconnected world.
Grassi reminded us that an often-overlooked leadership skill is curiosity. In his view the most effective leaders of tomorrow will be inherently curious — not just about emerging technologies but about clients, market shifts and global trends. Encouraging curiosity and continuous learning within our firms will distinguish the true industry leaders from those simply reacting to change.
A balanced future
What’s clear from speaking to our leaders is PrimeGlobal’s role in fostering trust, community and knowledge sharing. McCall recommended member-driven panels to discuss AI implementation and automation strategies and share best practice. Nail, on the other hand, valued PrimeGlobal’s focus on addressing critical industry issues and encouraged continuous evolution to meet professionals’ changing needs.
The future of leadership in the accountancy profession hinges on a balanced approach, leveraging AI to enhance efficiency while cultivating essential human skills that technology cannot replicate, which Grassi highlights skills including leadership and building client trust.
As McCall and Nail advocate, the next generation of accountants must be agile thinkers, skilled communicators and strategic decision-makers. Firms that invest in these competencies will not only stay competitive but will also shape the future of the industry by developing well-rounded leaders prepared for the challenges ahead.
By investing in both AI capabilities and essential human skills, firms can not only future proof their leadership but also shape a resilient and forward-thinking profession ready to meet the challenges of the future.
As Grassi concluded, while technical skills provide the foundation, leadership in accounting increasingly demands emotional intelligence, empathy and adaptability. AI will change how we perform our work, but human connection, trust and nuanced judgment are irreplaceable. Investing in these human-centric skills today is critical for firms aiming to build resilient leaders of tomorrow. To remain relevant and thrive, professionals must prioritize developing strong success skills that will define the leaders of tomorrow.