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What a second Trump administration could mean for your money

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Tackling Taxes

On the campaign trail, President Donald Trump promised lower taxes, lower prices and a stronger economy in his second term.

On Day One of his second term, Trump signed a flurry of executive orders — including a regulatory freeze pending an administration review and a directive to members of his administration to assess trade relationships with Canada and China and Mexico — to try and move some of his goals forward. But delivering on those and other promises will take additional steps, and in many cases, the support of Congress. 

Here are five ways a second Trump administration could impact your finances.

The White House did not immediately respond to requests from CNBC for comment.

1.Tariffs could send prices higher

One wildcard is tariffs. There are a range of views on how Trump will use tariffs and the impact those tariffs will have on prices. Tariffs are paid by businesses buying the goods and some of the cost is typically passed to consumers

During the campaign, Trump promised a 10% across-the-board tariff on all imports, a 25% tariff on all goods from Mexico and Canada and a tariff of up to 60% on products from China. Trump’s Day One order to assess trade relationships puts an April 30 deadline on those reviews.

“We view Trump’s decision against announcing new tariffs on his first day in office as evidence of the ongoing internal debate over how best to implement the duties, not as a sign of plans to significantly scale back or withdraw his campaign pledges to impose new duties on foreign goods,” Beacon Policy Advisors wrote in a research note.

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During his confirmation hearing last week, Trump’s pick for Treasury secretary Scott Bessent told lawmakers to think about tariffs in three ways: as a remedy for unfair trade practices, a revenue raiser and a negotiating tool. He pushed back on Democrats who said tariffs will mean higher prices for consumers.

“China, which is trying to export their way out of their current economic malaise, will continue cutting prices to maintain market share,” Bessent said. 

2. Tax rates and deductions may change

Unless Congress takes action, trillions of tax breaks are scheduled to expire at the end of the year, including lower tax brackets. More than 60% of taxpayers could see higher taxes in 2026 without extensions of provisions in the Tax Cuts and Jobs Act, or TCJA, according to the Tax Foundation.

Extending those provisions is a heavy lift amid concerns over ballooning federal debt. According to the Congressional Budget Office, the federal budget deficit is expected to rise to $1.9 trillion this year, adding more onto the $36.2 trillion in outstanding debt.

TCJA provisions will cost an estimated $4 trillion dollars over the next 10 years, according to a budget model by Penn Wharton. Trump also promised to eliminate taxes on tips and Social Security, which would drive the price tag exponentially higher. That puts a lot up for negotiation as lawmakers debate spending and taxes this year. 

“Fiscal pressures are going to weigh harder on the debate than they did the first time around,” Erica York, a senior economist and research director at the Tax Foundation, said at CNBC’s Financial Advisor Summit in December.

Experts predict one of the key battles will be over the state and local tax deduction, also known as SALT.  Under current law those deductions are now capped at $10,000. High-tax states like California, New York and New Jersey all have top tax rates above 10%, so changes there would be meaningful for many taxpayers who itemize deductions. Putting that cap in place freed up an estimated $100 billion a year in the federal budget, helping offset other cuts. 

The maximum child tax credit was also doubled under the TCJA, from $1,000 to $2,000. On the campaign trail, Vice President JD Vance said he wants to increase the credit to $5,000. Trump has said he supports the credit, but has not specified an amount. Both are costly in budget terms. 

3. Health care costs may increase

To keep Trump’s campaign promise to protect Social Security and Medicare, cuts to other health care programs become a way to fund tax proposals. House Republican lawmakers have identified $2.3 trillion in cuts to Medicaid, according to a document made public by Politico.

Subsidies to lower the cost of health insurance under the Affordable Care Act are also at risk. Without an extension by Congress, the subsides expire at end of 2025. Some individuals could see their premiums significantly increase. Because policy changes under the budget reconciliation process are limited, some analysts expect those subsidies to run out.

“It’s unfortunate because there are any number of compromises that could be crafted to better target the subsidies in exchange for extending them and stabilizing the market,” said Kim Monk, a partner at Capital Alpha Partners. 

4. Credit card rates could move lower

People with credit card balances could benefit if Trump makes good on his proposal for a temporary 10% cap on credit card interest rates. Senator Bernie Sanders, I-Vt., said on Thursday he was drafting legislation to do exactly that. The catch: If enacted, experts say, it could also make it harder for people to get credit.

While analysts say a cap is unlikely, the attention to the issue puts it on the watch list.

“It means there is risk that Trump could intervene with credit card policy even if it is not a draconian interest rate cap,” said Jaret Seiberg, a financial policy analyst at TD Cowen.

5. Markets may be more volatile

Traders work on the New York Stock Exchange (NYSE) floor in New York City. 

Spencer Platt | Getty Images

With so many policy changes expected and so much uncertainty with how they will unfold, experts predict that markets could be volatile.

“This first year here, 2025, it’s going to be super volatile,” said Dan Casey, an investment advisor at Bridgeriver Advisors in Bloomfield Hills, Michigan.

The key for individuals is to understand their personal financial situation so they don’t have to sell if the market is down. 

“It’s knowing your numbers and whatever money you have in the market,” Casey said.

For long-term goals like retirement, he said, “hold your nose and not open up the statements for a while, because it can get that ugly.”

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Summer Fridays are increasingly rare as hybrid schedules gain steam

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People enjoy an unusually warm day in New York City as temperatures reach the low 80s on June 4, 2025 in New York City.

Spencer Platt | Getty Images

Summer Fridays may be considered the most desirable perk of the season, but fewer employers are on board with the shortened workweek.

Companies have steadily phased out summer Fridays — a policy that allows workers to take Friday afternoon off over the summer months — as work-from-home Fridays became more common, experts say.

“Pre-pandemic, summer Fridays were thing, but hybrid overall has taken over,” said Bill Driscoll, technology workplace trends expert at staffing and consulting firm Robert Half.

As more commuters settle into flexible working arrangements, fewer workers are making Friday trips at all compared to mid-week traffic patterns, according to the 2024 Global Traffic Scorecard released in January by INRIX Inc., a traffic-data analysis firm.

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Among employees, however, summer Fridays are the most valued summer benefit, followed by summer hours and flextime, according to a new survey by job site Monster, which polled more than 400 U.S. workers in June. 

“Summer Fridays are highly valued among workers because, for many, they represent more than just a few extra hours off,” said Scott Blumsack, Monster’s chief strategy and marketing officer. This perk “can go a long way in showing employees they’re valued, which can help prevent burnout, boost morale, and improve retention during a season when disengagement can run high.”

Still, 84% of workers are not offered any summer-specific benefits, even though 55% also said those benefits improve productivity, Monster found.

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Instead, hybrid — and to a lesser extent fully remote — job postings have increased in the last year as employers compete for talented job seekers who prioritize flexibility, according to research by Robert Half.

“Hybrid is a highly desirable situation right now and one that all levels of employees are looking for,” said Robert Half’s Driscoll.

More than five years after the pandemic, 72% of organizations also have return-to-office mandates, according to a separate hybrid work study by Cisco.

But, even with the mandates, employees are less likely to work in the office on Fridays, and much more likely to commute Monday to Thursday, Cisco found.

Employees value flexibility

As employee burnout and disengagement grows amid the wave of in-office mandates, work-life balance and flexible hours have become increasingly important, other studies show.

Corporate wellness company Exos, which works with large organizations such as JetBlue and Adobe, says burnout has gone down significantly among employees at firms that have made Fridays more flexible. Exos also tested out “You Do You Fridays” — and found significant benefits.

The more adaptable the schedule, the more positively employees view their company’s policies, the Cisco report also found.

With hybrid arrangements now common, workers put a high value on that flexibility — and 63% of all workers would even accept a pay cut for the option to work remotely more often, according to Cisco’s global survey of more than 21,500 employers and employees working full-time.

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How House Republicans’ ‘big beautiful’ bill may affect children

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Speaker of the House Mike Johnson, R-La., pictured at a press conference after the House narrowly passed a bill forwarding President Donald Trump’s agenda on May 22 in Washington, DC.

Kevin Dietsch | Getty Images

House reconciliation legislation, also known as the One, Big, Beautiful Bill, includes changes aimed at helping to boost family’s finances.

Those proposals — including $1,000 investment “Trump Accounts” for newborns and an enhanced maximum $2,500 child tax credit — would help support eligible parents.

Proposed tax cuts in the bill may also provide up to $13,300 more in take-home pay for the average family with two children, House Republicans estimate.

“What we’re trying to do is help hardworking Americans who are trying to provide for their families and make ends meet,” House Speaker Mike Johnson, R-La., said during a June 8 interview with ABC News’ “This Week.”

Yet the proposed changes, which emphasize work requirements, may reduce aid for children in low-income families when it comes to certain tax credits, health coverage and food assistance.

Households in the lowest decile of the income distribution would lose about $1,600 per year, or about 3.9% of their income, from 2026 through 2034, according to a June 12 letter from the Congressional Budget Office. That loss is mainly due to “reductions in in-kind transfers,” it notes — particularly Medicaid and the Supplemental Nutrition Assistance Program, or SNAP, formerly known as food stamps.

20 million children won’t get full $2,500 child tax credit

A member of MomsRising holds a sign on Capitol Hill to urge lawmakers to reject tax breaks for billionaires and protest cuts to Medicaid and child care on Capitol Hill on May 8 in Washington, D.C.

Brian Stukes | Getty Images Entertainment | Getty Images

House Republicans have proposed increasing the maximum child tax credit to $2,500 per child, up from $2,000, a change that would go into effect starting with tax year 2025 and expire after 2028.

The change would increase the number of low-income children who are locked out of the child tax credit because their parents’ income is too low, according to Adam Ruben, director of advocacy organization Economic Security Project Action. The tax credit is not refundable, meaning filers can’t claim it if they don’t have a tax obligation.

Today, there are 17 million children who either receive no credit or a partial credit because their family’s income is too low, Ruben said. Under the House Republicans’ plan, that would increase by 3 million children. Consequently, 20 million children would be left out of the full child tax credit because their families earn too little, he said.

“It is raising the credit for wealthier families while excluding those vulnerable families from the credit,” Ruben said. “And that’s not a pro-family policy.”

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A single parent with two children would have to earn at least $40,000 per year to access the full child tax credit under the Republicans’ plan, he said. For families earning the minimum wage, it may be difficult to meet that threshold, according to Ruben.

In contrast, an enhanced child tax credit put in place under President Joe Biden made it fully refundable, which means very low-income families were eligible for the maximum benefit, according to Elaine Maag, senior fellow at the Urban-Brookings Tax Policy Center.

In 2021, the maximum child tax credit was $3,600 for children under six and $3,000 for children ages 6 to 17. That enhanced credit cut child poverty in half, Maag said. However, immediately following the expiration, child poverty increased, she said.

The current House proposal would also make about 4.5 million children who are citizens ineligible for the child tax credit because they have at least one undocumented parent who files taxes with an individual tax identification number, Ruben said. Those children are currently eligible for the child tax credit based on 2017 tax legislation but would be excluded based on the new proposal, he said.

New red tape for a low-income tax credit

House Republicans also want to change the earned income tax credit, or EITC, which targets low- to middle-income individuals and families, to require precertification to qualify.

When a similar requirement was tried about 20 years ago, it resulted in some eligible families not getting the benefit, Maag said. The new prospective administrative barrier may have the same result, she said.

More than 2 million children’s food assistance at risk

Momo Productions | Digitalvision | Getty Images

House Republican lawmakers’ plan includes almost $300 billion in proposed cuts to the Supplemental Nutrition Assistance Program, or SNAP, through 2034.

SNAP currently helps more than 42 million people in low-income families afford groceries, according to Katie Bergh, senior policy analyst at the Center on Budget and Policy Priorities. Children represent roughly 40% of SNAP participants, she said.

More than 7 million people may see their food assistance either substantially reduced or ended entirely due to the proposed cuts in the House reconciliation bill, estimates CBPP. Notably, that total includes more than 2 million children.

“We’re talking about the deepest cut to food assistance ever, potentially, if this bill becomes law,” Bergh said.

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Under the House proposal, work requirements would apply to households with children for the first time, Bergh said. Parents with children over the age of 6 would be subject to those rules, which limit people to receiving food assistance for just three months in a three-year period unless they work a minimum 20 hours per week.

Additionally, the House plan calls for states to fund 5% to 25% of SNAP food benefits — a departure from the 100% federal funding for those benefits for the first time in the program’s history, Bergh said.

States, which already pay to help administer SNAP, may face tough choices in the face of those higher costs. That may include cutting food assistance or other state benefits or even doing away with SNAP altogether, Bergh said.

While the bill does not directly propose cuts to school meal programs, it does put children’s eligibility for them at risk, according to Bergh. Children who are eligible for SNAP typically automatically qualify for free or reduced school meals. If a family loses SNAP benefits, their children may also miss out on those benefits, Bergh said.

Health coverage losses would adversely impact families

A protestor holds a sign on May 7, 2025 in Washington, D.C.

Leigh Vogel | Getty Images Entertainment | Getty Images

Families with children may face higher health care costs and reduced access to health care depending on how states react to federal spending cuts proposed by House Republicans, according to the Center on Budget and Policy Priorities.

The House Republican bill seeks to slash approximately $1 trillion in spending from Medicaid, the Children’s Health Insurance Program and Affordable Care Act marketplaces.

Medicaid work requirements may make low-income individuals vulnerable to losing health coverage if they are part of the expansion group and are unable to document they meet the requirements or qualify for an exemption, according to CBPP. Parents and pregnant women, who are on the list of exemptions, could be susceptible to losing coverage without proper documentation, according to the non-partisan research and policy institute.

Eligible children may face barriers to access Medicaid and CHIP coverage if the legislation blocks a rule that simplifies enrollment in those programs, according to CBPP.

In addition, an estimated 4.2 million individuals may be uninsured in 2034 if enhanced premium tax credits that help individuals and families afford health insurance are not extended, according to CBO estimates. Meanwhile, those who are covered by marketplace plans would have to pay higher premiums, according to CBPP. Without the premium tax credits, a family of four with $65,000 in income would pay $2,400 more per year for marketplace coverage.

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‘White collar’ jobs are down — but don’t blame AI yet, economists say

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Artificial intelligence makes people more valuable, according to PwC’s 2025 Global AI Jobs Barometer report.

Pixdeluxe | E+ | Getty Images

While there hasn’t been much hiring for so-called “white collar” jobs, the contraction is not because of artificial intelligence, economists say. At least, not yet.

Professional and business services, the industry that represents white-collar roles and middle and upper-class, educated workers, hasn’t experienced much hiring activity over the past two years.

In May, job growth in professional and business services declined to -0.4%, slightly down from -0.2% in April, according to the Bureau of Labor Statistics. In other words, the sector has been losing job opportunities, according to Cory Stahle, an economist at job search site Indeed.

Meanwhile, industries like health care, construction and manufacturing have seen more job creation. In May, nearly half of the job growth came from health care, which added 62,000 jobs, the bureau found.

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However, economists have said that the decline in white-collar job openings is more driven by structural issues in the economy rather than artificial intelligence technology taking people’s jobs. 

“We know for a fact that it’s not AI,” said Alí Bustamante, an economist and director at the Roosevelt Institute, a liberal think tank.

Indeed’s Stahle agreed: “This is more of an economic story and less of an AI disruption story, at least so far.”

Artificial intelligence is still in early stages

There are a few reasons AI is not behind the declining job creation in white-collar sectors, according to economists.

For one, the decline in job creation has been happening for years, Bustamante said. In that timeframe, AI technology “was pretty awful,” he said.

What’s more, the technology is even now still in early stages, to the point where the software cannot execute key skills without human intervention, said Stahle.

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A 2024 report by Indeed researchers found that of the more than 2,800 unique work skills identified, none are “very likely” to be replaced by generative artificial intelligence. GenAI creates content like text or images based on existing data.

Across five scenarios — “very unlikely,” “unlikely,” “possible,” “likely” and “very likely” — about 68.7% of skills were either “very unlikely” or “unlikely” to be replaced by GenAI technology, the site found. 

“We might get to a point where they do, but right now, that’s not necessarily looking like it’s a big factor,” Stahle said. 

‘Jobs are going to transform’

A separate report by the World Economic Forum in January forecasts that by 2030, the new technology will create 170 million new jobs, or 14% of the current total employment.

However, that growth could be offset by the decline in existing roles. The report cites that about 92 million jobs, or 8% of the current total employment, could be displaced by AI technology.

For knowledge-based workers whose skills may overlap with AI, consider investing in developing skills on how to use AI technology to stay ahead, Stahle said.

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