Does the president control the economy?

About 50% of Americans believe that the winner of the presidential election will influence their own finances, and a recent survey conducted by fintech company Empower found. And although the president can do many things on his own – e.g invade the country Or declare a state of emergency — their impact on the economy and stock market is more diverse.

The economy is not just one thing – it is influenced by many different factors and components.

Here’s what the presidential candidates said about the following topics that could impact Americans’ finances:

Tariffs

One common political refrain is that the president can’t do anything without the support of Congress. And while this is often true, there is a notable exception: tariffs.

A tariff is a tax on goods imported from another country, and federal law allows the president to impose them without congressional approval. Former President Donald Trump, who imposed several rounds of tariffs during his term, announced he would raise rates to boost U.S. manufacturing, including 60% customs duty on all goods from China.

“It could be very damaging to the economy and would have a negative impact on the stock market,” said David Kass, a clinical professor of finance at the University of Maryland’s Robert H. Smith School of Business.

When a country raises tariffs, the difference in costs is usually passed on to the consumer. That means higher prices for everything that isn’t made in America – and that means most things.

“You’re going to be poorer because everything you buy will be more expensive,” said Nicholas Creel, an assistant professor of business law at Georgia College & State University.

Tax cuts

The next president will face major changes to the tax code, and he will need the support of Congress to make his plans a reality. Some of the cuts Trump implemented in 2017 are scheduled to end next year.

Trump says he wants to cut taxes again so that most of the benefits go to corporations and non-middle-class people.

“His economic tax plan would be a significant boon to the wealthy top 5%,” Creel said. “Almost everyone else will be no better off in the short term, and almost everyone else will be worse off in the long term.”

Vice President Kamala Harris may face resistance over her proposal to maintain 2017 tax cuts for people making up to $400,000 a year and raise rates for people earning more.

Student loans

Can the president cancel student loans? In 2023, the Supreme Court rejected President Joe Biden’s initiative to provide debt relief to 40 million borrowers, ruling that the plan required congressional approval.

Trump has repeatedly said he wants to cut education spending, including: less funding for student loan relief programs. Harris is expected to continue efforts she made with Biden to reduce student loan debt, but analysts don’t expect quick results.

“Any progress that has been made would come to an immediate halt under a Trump administration,” Creel said. “He would have plowed on under Harris. They are still looking for piecemeal ways to deal with it.

Small companies

Harris and Trump’s business aid proposals would also require a friendly Congress.

Harris wants to encourage people to start businesses and plans to offer a $50,000 tax credit to new business owners — that’s a huge increase over the current $5,000 tax credit. This can make it easier for small businesses to succeed, especially those that don’t have family or other support.

“Small business success rates should increase significantly,” Creel said.

Trump wants to – perhaps – offer additional tax cuts to larger companies reducing the corporate income tax rate to 15%. It intends to pay for the reduction by increasing customs duties.

Kass said many Wall Street experts believe a Harris administration – with higher corporate tax rates – will hurt companies. As corporate profits are likely to fall due to higher tax rates, stocks could fall.

That’s one reason Kass says Wall Street prefers divided government – with one party leading and the other leading Congress.

“That almost seems to be the consensus coming from Wall Street,” Kass said.

Congressional races matter

While it’s important to look at the president’s policies and budgets, it’s also important to keep in mind another important factor: which party will take over the House and Senate.

“Much of the power the president will have will depend on who controls Congress,” Kass said.

If Harris wins but has a Republican House and Senate, it will be difficult for her to pass many of her ideas. The same would apply to Trump in a Democratic Congress.