In this week’s “Make Me Smart” newsletter, we explore how President-elect Donald Trump’s campaign promises could shape the U.S. economy over the next four years. Plus, we do the numbers on 2024 state ballot measures and dig into the potential overuse of tooth implants.

Donald Trump won a second term as president this week, promising an end to the “inflation nightmare” through some potentially inflationary policies. Here’s what the economy could look like under Trump 2.0. 

Tariffs = higher prices. Trump has proposed 20% across-the-board-tariffs on goods imported from other countries and up to 60% on goods from China. He also has pledged to raise tariffs on Mexican goods to 25% or higher to discourage illegal immigration at the southern border. Tariffs on foreign products raise the cost of doing business for American companies, which are likely to pass that cost on to consumers at home. One shoemaker whose footwear is mostly made in China told Marketplace that he’d have to charge customers an extra $25 per pair. 

The cost of tariffs would fall disproportionately on workers and consumers in Trump-supporting states, Bloomberg’s editorial board pointed out, because they depend more on foreign-made goods than blue states.

Corporate tax cuts = optimistic Wall Street. Trump cut the corporate tax rate from 35% to 21% in his first term. He promised another cut to 15% on the campaign trail this year, and stocks surged when he clinched the race as a result.

Tax cuts galore. Trump wants to extend income tax cuts he originally signed into law in 2017. He’s also proposed tax exemptions for tip income, overtime pay and Social Security benefits. The nonpartisan Institute on Taxation and Economic Policy estimates that the tax cuts would benefit households making $360,000 or more per year, the wealthiest 5% of Americans. But everyone else could end up behind, because the tax cuts they’d receive wouldn’t offset higher prices due to tariffs.

Another analysis of Trump’s proposed tax cuts and tariffs by the Tax Foundation found that the bottom 40% of households would see their after-tax income decrease, while middle-income households would have very slight increases to after-tax income.  

A growing deficit. Though tax cuts often spur economic growth, that growth typically doesn’t pay for itself in the form of new tax revenues. The nonpartisan Committee for a Responsible Federal Budget estimates Trump’s tax cuts would add $9.15 trillion over the next decade to the national debt, which is currently about $36 trillion. The government is already spending more on interest tied to debt than it spends on the annual defense budget.

Fewer immigrants = less growth. Deporting millions of unauthorized immigrants, as Trump has promised to start to do on Day 1 of his second term, would shrink the overall workforce and likely slow down overall economic growth. Researchers debate the impact it would have on wages for American workers in lower-paying jobs.

Food prices at grocery stores and restaurants could go up as well, as agriculture and restaurants heavily employ migrant workers without legal status.

Higher borrowing costs may stick around for longer. Though the Federal Reserve cut interest rates Thursday, some Wall Street economists expect fewer rate cuts in 2025 due to the upward pressure on prices that Trump’s economic policies are likely to produce.

Smart in a shot

Forty percent of working-age Americans have lost at least one permanent tooth due to decay or damage. Nearly 1 in 5 people 75 years and older have lost the whole mouthful. But some patients are losing teeth because their dentist recommended removing them in favor of expensive implants, which cost a few thousand per tooth or five figures for a total smile overhaul. And because of how dental insurance works in the U.S., patients are often on the hook to pay out of pocket as most plans don’t consider implants medically necessary.  

A joint investigation by KFF Health News and CBS News found many dentists are pushing total replacement of teeth, driven in part by monetary gain. Many of the experts interviewed for the investigation expressed concerns of their overuse, especially as more general dentists are offering the procedure.

Unlike bridges and dentures, implants can replace both the visible part of the tooth and the root below the gumline, which left undisturbed can cause further bone deterioration. But replacing a viable tooth can lead to more complications down the line, and more costs. While implants can’t get cavities, they increase risk of infections in the gums and bone. 

“It is generally better for patients to have their natural teeth,” KFF and CBS reported, yet the market for implants has grown 6% on average every year since 2010. As the number of implants has grown, so too have lawsuits over procedures that went wrong and allegations that patients were pressured or misled to remove their natural teeth.

The Numbers

In addition to electing lawmakers, judges, governors and a new president, Americans across 41 states voted on 146 ballot initiatives and referendums this week. Let’s do the numbers.

1778

Massachusetts was the first state to hold a statewide legislative referendum when its residents voted to ratify the state’s constitution.

$15

Missouri and Alaska voted to increase their minimum wages to $15 by 2026 and 2027, respectively. 

Working 40 hours per week, that’s a $31,200 annual salary. Massachusetts Institute of Technology researchers estimate the average “living wage” for a household of four with two working adults is $25.02 per hour.California voters narrowly rejected raising the state’s minimum wage to $18 per hour. Alaska, Missouri and Nebraska voters also approved measures that will require employers to offer paid sick leave.

$200 million

The costliest ballot initiative fights were in California, where two groups spent about $200 million on dueling proposals. Proposition 33, which didn’t pass, would have allowed cities to expand rent control to single-family homes. Proposition 34, which did pass, will limit certain kinds of health care spending. But it’s also characterized as a form of political revenge, because when enacted, it will only apply to one organization whose activist founder funded Prop. 33 and other housing-related measures.

7 in 10

Voters in seven states passed ballot initiatives to expand or affirm access to abortion; three did not. National access to abortion could be restricted in a second Trump term, if his administration deems mail-order delivery of abortion pills a violation of the Comstock Act of 1873. 

56%

A majority of Floridians voted to legalize recreational marijuana, but the measure failed to reach the 60% support required to pass. Similar measures in North Dakota and South Dakota also failed. Economists have found legalization comes with economic benefits and social costs.

None of us is as smart as all of us

Tell us what’s making you smarter at smarter@marketplace.org. We’d love to include your recommendation in a future newsletter.

The “fair” price

Inflation has cooled and consumer prices are more stable than a few years ago, but consumers can’t shake sticker shock. That’s because prices are still out of sync with what shoppers think is fair. Writer Ellen Rolfes is reading a New York Times story (gift link) about how “reference prices” influence economic sentiment.  

Cooking up streaming deals

Subscription services only turn a profit if subscribers stick around a while. Editor Tony Wagner is reading a Hollywood Reporter article about how Peacock, Disney+ and other streamers are partnering with food delivery apps to reduce subscriber churn.

“Running is the new golf”

Ever wonder how marathons make money? Our peers at Morning Brew made a great video breaking it down. (Shoutout to Marketplace producer Jamila Huxtable for running the NYC Marathon last weekend!)