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Yahoo
3 days ago
- Business
- Yahoo
5 Ways Trump's ‘Big, Beautiful Bill' Could Impact Your Wallet
President Donald Trump's 'big, beautiful bill,' which has passed in the House of Representatives, has sparked fierce debate. While the bill promises growth and relief in some areas, it also introduces cuts, cost shifts and structural changes that could impact everything from healthcare premiums to loan payments — and affect the budgets of everyday Americans. Read Next: Check Out: Here are five key ways this sweeping legislation could affect your wallet. One of the bill's most consequential provisions is the move to make the 2017 tax cuts permanent. Experts said these tax cuts could extend financial relief to many individuals and families, encouraging long-term economic growth. 'These tax cuts provide much-needed relief to small businesses and individuals and encouraged billions of dollars in economic activity and investment,' said Javier Palomarez, founder and CEO of the United States Hispanic Business Council. 'Extending these cuts would allow businesses to invest and grow at a faster rate.' He explained that these cuts could have a positive impact overall. 'Extending these cuts could have a far greater, and a more positive impact than changes to SNAP or Medicaid,' he said. Learn More: One overlooked consequence of the bill is how it could quietly raise the cost of borrowing across the board. From home mortgages to car loans, everyday Americans could find themselves paying more to afford basic milestones. 'The proposed legislation could increase your expenses by increasing your mortgage payments for a house,' said Steven Conners, founder and president of Conners Wealth Management. 'Mortgage rates are high but still going up. Furthermore, this doesn't count higher loan rates for car loans and other purchases that are more significant in price, where we ordinarily buy them through a loan which is based off the bond market.' He added that the bond market is already reacting to the bill, signaling that borrowing costs could keep rising. With national debt on the rise and no clear ceiling for interest rates yet, Conners said that the overall trend points toward more expensive loans. According to a bill analysis by the Center on Budget and Policy Priorities, by 2034, about 16 million people could lose health coverage and become uninsured due to a variety of proposals in the bill, including Medicaid cuts. Middle-income families who rely on Affordable Care Act (ACA) support or Medicaid expansion could also be affected. 'Premiums will most likely increase,' Conners said. 'For those less fortunate, Medicaid will see less funding, which ultimately puts more pressure on this part of the population.' Working families who rely on SNAP benefits could feel the sting of the bill almost immediately. A combination of benefit reductions and new restrictions could make it more difficult for many households to afford sufficient food. 'The most immediate impact will be the reduction of benefits received by those enrolled in SNAP,' Palomarez said. He explained that these cuts, as well as the administration's push to have states restrict SNAP-eligible items, could result in strained food budgets for many Americans. While many assume that cutting SNAP benefits would affect only low-income households, the impact can ripple across entire communities and state economies. A Commonwealth Fund analysis found that reduced food assistance can lead to job losses and decreased business activity, even in places far from where the cuts occur. For instance, groceries purchased in Georgia might support farmers in Kansas or processors in Tennessee, and a clinic closure in Louisiana could result in a nurse losing her job in Texas, per The Commonwealth Fund. One of the bill's measures targets the opaque practices of pharmacy benefit managers. 'Certain provisions related to pharmacy benefit manager (PBM) reform have the potential to significantly lower prescription prices for everyday Americans,' Palomarez said. 'Unlike the strict price control measures threatened by the administration earlier this year, the Big Beautiful Bill relies on transparency with consumers and mandated reporting to NADAC to ensure consumers can make the most informed decisions.' Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 5 Cities You Need To Consider If You're Retiring in 2025 I'm a Retired Boomer: 6 Bills I Canceled This Year That Were a Waste of Money This article originally appeared on 5 Ways Trump's 'Big, Beautiful Bill' Could Impact Your Wallet Sign in to access your portfolio
Yahoo
13-05-2025
- Automotive
- Yahoo
6 Ways Trump's Tariffs Make the American Dream More Expensive
The American Dream once meant a home, a car, putting the kids through college and a comfortable retirement. Find Out: Try This: However, President Donald Trump's tariff policies threaten to inflate the cost of the American Dream and reshape the path to financial security. Some experts said Trump's economic and trade policy shifts make once-attainable milestones more expensive, harder to plan for and out of reach for many middle-class families. Here are the six ways Trump's tariffs make the American Dream more expensive. Tariffs on materials like steel, lumber and copper directly raise construction costs. These costs are passed on to buyers and increase the price of new homes and renovations. 'Tariffs squeeze the dream by inflating the base layer,' said Shane Lucado, CEO of InPerSuit Inc., a legal technology company. 'You slap a tariff on construction inputs and suddenly a $280,000 starter home costs $317,000 before interest.' Lucado explained, 'That jump kills the down payment plan for a first-time buyer working with a $60,000 salary. Stretching budgets is one thing. Rewriting your life math is another.' Be Aware: Tariffs raise car prices because they increase the cost of parts and materials. For consumers, it means more debt, longer loan terms and fewer options. 'We have to remember the price increase is not only on the end product, but also on the parts and raw materials that come from all over the world prior to assembly,' said Babak Hafezi, CEO of HafeziCapital. 'Thus, you are paying multiple tariff taxes for the same product.' Hafezi added, 'As costs increase, people may be forced to buy smaller cars with less options — because of affordability — or be forced into the used car market.' Tariff-driven price increases on starter homes, cars and essentials make it harder for first-time buyers to gain traction, especially without the equity or stable wages that previous generations enjoyed. 'Younger Americans catch the worst of it, because they are the first generation paying inflated prices on everything without the benefit of long-held equity,' Lucado said. 'Their parents bought homes when rates were 4% and wood was cheap. 'Now, 20-somethings are getting boxed out before they even apply. … When 50% of your take-home pay is housing and transportation, the rest of the dream starts evaporating.' Achieving the American Dream depends on stable access to goods that make those goals possible. However, as tariffs ripple through supply chains, they drive up prices, delay essentials and put the American Dream on backorder. 'To absorb higher costs, companies will likely have to raise prices and alter supply chains, in turn raising prices for consumers, affecting availability and delaying shipping times,' said Javier Palomarez, CEO of the United States Hispanic Business Council. Delayed supply chains cause middle- and low-income households to strain their budgets and review their purchase preferences, said Michael Podolsky, consumer advocate and co-founder and CEO of PissedConsumer. 'Some shoppers already report facing additional costs and delayed deliveries with customers, leaving them with higher bills,' Podolsky said. 'In some cases, parts for things like appliances or home products become harder to purchase, which directly affects essential purchases.' Homeownership is central to the American Dream. However, tariffs are making it more expensive to hold on to. When emergency repairs spike due to higher material costs, even insured homeowners can find themselves facing unexpected bills that threaten their financial stability. 'If your roof leaks or a storm damages your home, those repairs can become hundreds or thousands of dollars more expensive due to tariffs,' said Elena Novak, a real estate analyst at PropertyChecker. Novak added, 'Insurance often won't cover the full cost if prices have jumped. So, for many families, it's not just about buying home, it's about affording to maintain it.' The American Dream depends on long-term planning, such as saving for a home, a child's education or retirement. However, when tariffs drive up everyday costs, families are forced to delay those goals, using savings to manage immediate needs instead of building a stable future. 'You want to plan for childcare or a second car, but those plans get wiped when a supply-chain shock adds $7,000 to your renovation budget,' Lucado said. 'You start reshuffling savings to patch short-term damage instead of building toward anything long-term. That erosion does not show up in headlines. It shows up in delayed milestones, smaller families and crushed expectations.' Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates 5 Types of Vehicles Retirees Should Stay Away From Buying 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses 4 Things You Should Do if You Want To Retire Early Warren Buffett: 10 Things Poor People Waste Money On Sources Shane Lucado, InPerSuit Babak Hafezi, HafeziCapital Javier Palomarez, United States Hispanic Business Council Michael Podolsky, PissedConsumer Elena Novak, PropertyChecker This article originally appeared on 6 Ways Trump's Tariffs Make the American Dream More Expensive Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
11-05-2025
- Business
- Yahoo
Trump Wants To Eliminate Income Taxes: Here's How Long Experts Think It Could Take
President Donald Trump has expressed his desire to cut federal income taxes entirely and replace them with the income from higher tariffs, CNN reported. While Trump's proposal taps into frustration over taxes and globalization, some experts have said that such a sweeping change would face enormous political, legal and economic hurdles. Read Next: Check Out: Eliminating income taxes wouldn't happen overnight, even with full support. Here's how long experts think it could take. According to CNN, President Trump recently told reporters he wanted to eliminate federal income taxes altogether. In their place, he proposed significantly raising tariffs on imports, which would serve as the federal government's primary revenue source. 'We're going to make a lot of money, and we're going to cut taxes for the people of this country,' Trump said. 'It'll take a little while before we do that, but we're going to be cutting taxes, and it's possible we'll do a complete tax cut, because I think the tariffs will be enough to cut all of the income tax.' There aren't any official policy documents detailing plans. However, the U.S. Treasury Department found that individual income taxes have accounted for 51% of all federal revenue so far in fiscal 2025. Replacing that amount solely through tariffs would require unprecedented changes to the country's trade policy and consumer pricing. 'Bold tax reform has always fueled economic growth, but the complete elimination of income taxes faces steep political, fiscal and practical hurdles,' said Javier Palomarez, founder and CEO at the United States Hispanic Business Council. 'It's an inspiring vision for taxpayers and small businesses, but without a clear alternative to fund essential government services, full elimination is extremely unlikely.' Be Aware: Experts said the size and complexity of this change mean it would likely face a long, uncertain path even with full political backing. 'The bill would have to be crafted in such a way to get enough votes,' said Tasha Preisner, managing partner at DeMar Consulting Group. 'Then he (Trump) would need to add pressure on the correct people to vote for it. There would be conflict and pushbacks. It would be difficult, but possible.' And there are questions about whether the proposal would have support. 'I am not sure how much support there is even among Republicans to replace the income tax. Some Republicans have talked about a flat income tax with just one tax rate rather than a 'Fair Tax', the term being used for a national consumption tax,' said Mark Luscombe, principal analyst for Wolters Kluwer's Tax and Accounting division. Even if the bill were to be passed, it would likely take some time to go into effect. 'After a financial bill gets passed, it usually takes a few months to go into effect, but that depends on the bill itself and how it is written. Some bills take effect quicker than others. I would think that a larger overhaul would take a little more time than smaller changes,' Preisner said. Even if eliminating federal income taxes became a top political priority, experts say the process would likely take years, if it happens at all. Deep legislative hurdles, legal challenges and economic risks make it a long and uncertain journey. 'Legally, eliminating federal income taxes would require sweeping legislation passed by Congress and an overhaul of the Internal Revenue Code,' Palomarez said. 'Politically, it would demand a national consensus on not just eliminating a revenue source but replacing it. Without bipartisan agreement on how to fund programs like Social Security, Medicare and national defense, the effort would quickly stall.' With the velocity and intensity with which Trump has attempted to overhaul the federal government, some experts said it could be possible for Trump to eliminate federal income taxes within the next four years. 'I used to believe that Congress was too divided and that the opposing parties would take too strong of a stance to allow for income tax changes that would injure their favorite projects,' Preisner said. 'After watching months of large changes and government chaos, I have changed my point of view to believe that it could be possible for the current administration to kill off the income tax if they decided to.' Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates Mark Cuban: Trump's Tariffs Will Affect This Class of People the Most How Far $750K Plus Social Security Goes in Retirement in Every US Region How To Get the Most Value From Your Costco Membership in 2025 12 SUVs With the Most Reliable Engines Sources CNN, 'Trump says he'll eliminate income taxes. There's a problem with that.' Javier Palomarez, U.S. Hispanic Business Council Tasha Preisner, DeMar Consulting Group Mark Luscombe, Wolters Kluwer This article originally appeared on Trump Wants To Eliminate Income Taxes: Here's How Long Experts Think It Could Take Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
06-05-2025
- Business
- Yahoo
Trump's Tariff Plans Spark Uncertainty for the Denim Industry
'Many consumers might not know this, but the U.S. heavily relies on Mexico for our denim. In fact, in 2023, Mexico was the leading importer of denim fabric (made from at least 85 percent cotton) to the U.S., with imports valued at nearly $56 million, according to Statista,' said Javier Palomarez, founder and CEO of the United States Hispanic Business Council (USHBC). 'If Trump's tariffs on Mexico are broad and ultimately apply to many goods—including materials or products related to denim—the ultimate cost of importing denim from Mexico will greatly increase.' While specifics are currently scarce, twice-deferred 25-percent duties on goods from Mexico and Canada not covered by the United States-Mexico-Canada Agreement (USMCA) took effect on April 2, which Trump refers to as America's 'Liberation Day.' Fast-forward to 2025, and the president has continued his aggressive trade policies—this time with an even sharper focus on addressing trade imbalances and 'protecting domestic industries.' While China was a primary target of Trump's trade policies, his efforts to reshape global commerce extended beyond Asia. He also imposed the United States-Mexico-Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA)—signed in 1992 by Canada, Mexico and the U.S.—to create a 'more balanced and reciprocal trade environment, support high-paying jobs for Americans and foster economic growth in North America,' according to U.S. Customs and Border Protection. During his first term, Trump imposed tariffs on $380 billion worth of Chinese goods. In response to these aggressive trade measures, the U.S. and China negotiated a Phase One trade agreement in early 2020, aiming to rebalance their trade relationship and safeguard American intellectual property and technology. Since taking office as the 47th president just over two months ago, Trump has signed multiple executive orders that have caused panic across the globe, including efforts to dismantle the Department of Education and reduce the federal bureaucracy. However, one order that has put the denim industry—along with many others like pharmaceuticals and automotive—on edge is the president's plan to impose new tariffs on key trading partners, including Mexico. Story Continues Despite the challenges ahead, denim mills and brands remain cautiously optimistic. While Artistic Milliners (AM) is based in Pakistan, where most of its production takes place, it recently expanded its global footprint by acquiring VF Corporation's Dickies de Parras S. de RL de CV facility in Parras, Mexico. When the acquisition was announced, AM moved quickly to upgrade the 10-acre complex, which consists of two buildings. The company also reaffirmed its commitment to expanding in Mexico, stating that it remains on track to scale its operations in the region. Its decision to push forward with these plans showcases AM's confidence in the long-term viability of its expansion strategy, regardless of looming tariffs. 'We are continuing business as normal. We strongly believe in the add value benefit of being in [Mexico] and investing in it,' Sergio Turbay, executive vice president of global strategy and sales at AM, told SJ Denim. 'The great thing is that our brands and partners believe in this as well. So, we are continuing our investment, and we look forward to expanding our manufacturing in the region [even further].' Los Angeles-based women's denim brand Ética is also unconcerned about Trump's tariffs and is 'proceeding with business as usual.' 'As of right now, we're not too worried about it—but we'll see what happens [further down the line],' a sales representative at Ética Denim, which operates a factory in Puebla, Mexico, told SJ Denim. 'I've been asking our CEO [Agustin Ramirez] about it, and he doesn't seem too concerned. So, for now, we're taking a wait-and-see approach.' The representative added that Ética's size gives it more flexibility compared to larger brands. 'We're still a relatively small brand and company, so we're able to be a little nimbler than some of our bigger partners. That gives us some breathing room to adapt if needed.' Dr. Sheng Lu, professor of apparel studies at the University of Delaware, is not as optimistic, though. Lu noted that if denim products made in Mexico do face new tariffs when exported to the U.S., their price competitiveness could be significantly impacted, potentially leading to a loss of market share. Lu's research for the '2024 Fashion Industry Benchmarking Study,' conducted in collaboration with the United States Fashion Industry Association, shows that a significant portion of U.S. denim imports from Mexico serve the mass and value market segments, where consumers are highly sensitive to price changes. 'While Mexico is a key supplier of denim products to the U.S. market, similar products are also widely available from Asian countries like Bangladesh and China,' he said. 'Additionally, many 'Made in Mexico' denim garments incorporate U.S. cotton, yarns and fabrics through a regional supply chain. As a result, a decline in U.S. denim apparel imports from Mexico could also have a negative impact on the U.S. textile industry.' Beyond the tariff increases themselves, Lu noted that a major concern for U.S. denim brands is the ongoing uncertainty surrounding trade policy. With no sourcing destination considered 'safe' or immune to Trump's tariffs, U.S. brands and retailers are hesitant to commit to expanding production in any country, he added. 'A significant increase in sourcing 'Made in the USA' products is unlikely due to limited production capacity,' he said. 'Even sourcing diversification—once a widely adopted strategy to mitigate risk—may be less effective this time, as any country could be targeted.' Looming labor challenges Another significant challenge facing mills and brands is the increasing labor shortage in Mexico. For years, Mexico's appeal as a manufacturing hub has been driven by its low labor costs and young workforce. In fact, fully loaded manufacturing labor costs range from $6 to $8 an hour, including bonuses and benefits, while roughly one-third of the country's population—around 42 million people—is 19 or younger, according to Boston Consulting Group (BCG). However, Mexico's labor market has begun to show signs of strain. According to AM, rising labor costs in the region are largely due to the USMCA agreement aimed at 'leveling the playing field.' 'Fabric pricing in the region reflects what our clients expect compared to other regions and their macroeconomic situations,' Turbay said. 'Just like our clients, we must remain calm and take a long-term view. We believe that trade policies for clothing will eventually be exempt, and we're in a strong position to compete due to our global presence. This is a key differentiator that we're very excited about.' Erik Kingsley, partner at Kingsley Szamet law firm—where he focuses on employment law and workers' rights—echoed AM's sentiment, adding that Trump's proposed 25-percent tariffs on Mexican goods could have 'significant implications' for labor markets on both sides of the border. 'If these tariffs take effect, the immediate impact will likely be a downturn in Mexico's textile and apparel manufacturing sector. U.S.-based brands that currently rely on Mexican production may scale back orders, seek alternative suppliers or even relocate operations to avoid higher costs,' Kingsley said. 'This could result in job losses and wage stagnation for Mexican workers in these industries. In some cases, factories may shut down altogether if the cost increase makes them uncompetitive in the global market.' Over the long term, Kingsley added, continued aggressive trade policies could push companies to diversify their supply chains, reducing reliance on Mexico in favor of other manufacturing hubs in Central America or Asia. 'Mexico may respond by incentivizing domestic production or strengthening trade relationships with non-U.S. partners,' Kingsley said. 'Additionally, we could see increased automation in manufacturing as companies seek to offset higher costs by reducing labor dependence.' Beyond the impact on Mexico, these tariffs could also disrupt U.S. employment. 'If the cost of importing textiles rises significantly, American retailers and brands may face financial strain, leading to job cuts or price hikes that affect consumers. Additionally, since Mexico remains a key trading partner under the USMCA, these tariffs could strain diplomatic and economic relations,' Kingsley said. 'Businesses operating in both countries should prepare for potential volatility and legal challenges as these trade measures unfold.' Although the future remains uncertain, Patricia Medina, principal of Mexico-based denim manufacturer Aztex Trading and co-director of Mexmakers, a collaborative network of Mexican textile and apparel manufacturers focused on sustainable and traceable full-package production, believes Mexico will continue to be a vital manufacturing hub—especially for brands that recognize the shifting global landscape. 'The world in which NAFTA was created no longer exists, but Mexico still has a crucial role to play,' Medina said. 'We can and will serve the new markets—those that prioritize more than just the initial cost of production.' This article is published in SJ Denim's spring issue. Click here to read the full issue.
Yahoo
30-03-2025
- Business
- Yahoo
Will the US Implement a Caregiver Tax Credit? Experts Explain
Millions of Americans provide unpaid care for aging or ill family members, and it's costing them. 'Family caregivers spend, on average, over a quarter of their income on providing said care,' said Javier Palomarez, founder and CEO of the United States Hispanic Business Council. 'Considering the sustained rise of healthcare costs, this is only sure to increase.' Learn More: Read Next: To help ease the financial burden, lawmakers have proposed the Credit for Caring Act, a bill that would provide tax relief to eligible family caregivers. Experts say the credit could offer meaningful support — but its future is far from certain. The proposal would give caregivers a financial break on out-of-pocket expenses. 'The Credit for Caring Act proposes a tax credit of up to $5,000 per year based on 30% of 'qualified expenses' to the extent such expenses exceed $2,000,' explained Annette Nellen, a certified public accountant (CPA), attorney, and tax professor at San Jose State University. 'So if someone has expenses of $2,000 or less, no credit.' To qualify, 'the expenses must be paid by an 'eligible caregiver' who pays 'qualified expenses' for a 'qualified care recipient.' The taxpayer claiming the credit must have earned income above $7,500.' Nellen also notes that the credit is intended for middle to low-income individuals who pay these expenses. 'The credit starts to phase out when modified AGI exceeds $75,000 ($150,000 for a married couple),' she explained. Armine Alajian, CPA and founder of the Alajian Group, added context to what counts as a qualified expense: 'Those expenses might include adult day care, home improvements like safety handrails or paying for in-home healthcare aides.' Check Out: 'A tax credit would provide immediate relief to an estimated 53 million Americans that currently serve as unpaid family caregivers and provide an economic lifeline for those that have spent their time and money taking care of others,' said Palomarez. Shane Lucado, founder and CEO of InPerSuit, emphasizes the potential for financial relief: 'Many caregivers spend $7,000 or more each year on services such as home health aides and medical supplies, so a tax credit could ease some of that financial pressure.' Lucado also sees wider economic benefits. 'This credit would lower financial burdens for caregivers and lead to higher workforce participation rates from those who need to quit employment to provide care for family members,' he added. 'Workplace productivity losses could decrease when employees balance their work responsibilities with caregiving tasks.' Palomarez agrees the credit could improve care quality, too. 'The tax credit will also enable family caregivers to invest in higher quality equipment, medicine and surgeries,' he noted. Support for the bill is strong, but progress has been slow. 'This bill, which is something AARP has been trying to make a reality for more than 10 years, is one of the few issues that has bipartisan support among lawmakers and the public,' said Alajian. 'But despite that, a similar version of the bill didn't make it out of committee last year, so nothing is guaranteed.' Even if the bill becomes law, experts point out its limitations. 'While a tax credit of up to $5,000 would be a helpful sum,' said Alajian. 'Sadly, many people are forced to limit or even quit their jobs when caregiving becomes a full-time job in itself. So, it would be far from the amount needed to compensate for leaving a career.' Nellen raises another concern: The difficulty of navigating tax-based aid. 'The complexity of definitions, recordkeeping and calculations begs the question of whether providing this financial assistance through the tax law is the best approach,' Nellen said. 'Alternatives include providing assistance directly to the 'qualified care recipient' and offering more resources for care (care facilities, visiting nurses, etc.).' The bill's future is still unclear. 'Turning this tax credit into law presents difficulties since lawmakers must weigh the cost of its rollout against expected revenue declines,' said Lucado. 'The federal government has to find a way to pay for this credit while avoiding major effects on current social programs or deficit growth.' In other words, Congress would need to find money to fund the credit without cutting other programs or increasing the national debt. Still, with a growing population of unpaid caregivers and rising medical costs, experts agree the need is real — even if the solution is complicated. More From GOBankingRates 5 Types of Vehicles Retirees Should Stay Away From Buying 12 SUVs With the Most Reliable Engines 4 Things You Should Do if You Want To Retire Early 6 Big Shakeups Coming to Social Security in 2025 This article originally appeared on Will the US Implement a Caregiver Tax Credit? Experts Explain
