Project 2025 was a hot topic among both presidential candidates during their campaign.
While President-elect Donald Trump has previously distanced himself from it, he has nominated a few high-profile conservatives associated with the project to his administration.
So, what could you expect if Project 2025’s fiscal agenda becomes a reality?
Our guide will walk you through its essential economic policies and how they’ll impact Americans.
What Is Project 2025?
Project 2025 is a colossal 900-page policy agenda launched by The Heritage Foundation in 2022.
According to their site, the project brings together a “broad coalition of conservative organizations” to give the next administration a policy blueprint for how they should run the government starting next year.
The mandate aims to radically change the federal government. If the Trump administration follows it, these policies would affect everything including taxes, education, and social services.
Financial Changes You Can Expect Under Project 2025
The Project 2025 “playbook” has a section dedicated to finances, education, and more. Here are a few policy changes that could impact your finances:
No More Student Loan Forgiveness
It’s no surprise that student loan forgiveness may be a thing of the past, at least for now.
Trump has spoken out against it during his campaign, and Project 2025 largely echoes the President-elect’s statement. In their eyes, borrowers are “investors who expect their investments in higher education to pay off.” They don’t see the point of other taxpayers footing the bill for those who didn’t receive any “dividends” from their college degrees.
So, if you’re a borrower, it’s best to start saving and get ready for monthly payments as early as next year.
A Flatter Tax System
While President Trump might want to extend his Tax Cuts and Jobs Act (TCJA) next year, Project 2025 wants to take it further.
They want to simplify the tax system by eliminating most progressive tax brackets and replacing them with a simple two-tier system.
Instead of the seven tax brackets we have now, taxpayers would pay 15% or 30%, depending on their income. Anyone making over $168,600 falls into the upper bracket.
From a tax point of view, a flatter tax makes it easier to know how much you owe each year. All you do is add your federal tax bracket plus state taxes, and you’re set.
But this new system is less generous than you’d think.
Project 2025’s tax reform would get rid of most deductions, exclusions, and other credits. Most taxpayers will have no choice but to pay the full amount each year.
A Lower Capital Gains Tax
Do you have any money invested in the stock market or have other passive income? Project 2025’s policies might work in your favor.
Currently, the top rate for capital gains is 20%. But if Trump implements this agenda’s policies, it’d go down to 15%. The plan also eliminates net investment taxes (NIIT) for single filers earning over $200k and married couples earning over $250k annually.
Universal Savings Accounts
You’ve probably heard that social security payments may run out before we retire. So, instead of solely relying on these payments, Project 2025 also calls for a “universal savings account” for each American.
They’ll work similarly to Roth IRAs but have a couple of differences that set them apart.
Every taxpayer could have a yearly after-tax contribution limit of $15,000, which is double the Roth IRA’s $7,000 threshold. Investors also have the choice to withdraw their funds whenever they need to, giving you more control over your cash than other alternatives.
Is Project 2025 Actually Going Through?
Many people were worried about Project 2025 passing if Trump won the election. But there’s no guarantee that this agenda will be taken seriously.
While the Trump administration might try to pass some of these policies, it’s unlikely that all of them would ever make it past Congress. Most of them will meet a lot of resistance from Democrats and more moderate Republicans who see Project 2025 as too radical.
Only time will tell if the president-elect will support these policies or strike his own path.
The Bottom Line
Project 2025 could forever change the US economy.
And while we don’t know if these policies will become reality, one thing’s clear: the new administration could potentially reshape the country’s future — for better or worse.
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