[Politics] Here’s what Trump is proposing for the economy

[Wolf.17]

 

President-elect Donald Trump on the campaign trail laid out a broad array of ideas aimed at making life more affordable and strengthening the economy, which rank at the top of voters’ concerns.

Nearly all of the measures, which lack detail, would require congressional approval. That could be tough to achieve in the partisan climate on Capitol Hill.

Here’s what you need to know about what Trump has said he’ll do to address the economy:Some parts of the 2017 Tax Cuts and Jobs Act, one of Trump’s signature achievements during his time in the White House, are scheduled to lapse at the end of 2025.

While the law reduced taxes for most people, Democrats often criticize the TCJA for disproportionately benefiting the wealthy.

Trump wants to extend all the individual income and estate tax cuts that the 2017 law provided. This includes, among other things, an increase to the standard deduction, lower marginal income tax rates for most income brackets, and an increase to the estate tax exemption.

Trump has suggested he would get rid of the cap on state and local tax deductions, known as SALT. The TCJA limited the deduction to $10,000, but the controversial cap expires at the end of 2025.

Additionally, Trump has called for lowering the corporate tax rate to 15% for certain companies. The TJCA permanently lowered the top corporate tax rate from 35% to 21%.

Trump would also restore companies’ ability to immediately deduct investments in equipment and research.

Eliminate taxes

The president-elect has rolled out a series of targeted tax breaks, including eliminating federal taxes on tips, Social Security benefits and overtime pay.

Trump was the first candidate to promise an end to taxes on tips, floating it at a rally in Las Vegas about two months earlier than Democratic presidential nominee Kamala Harris. Though his campaign hasn’t released details on the proposal, Trump has indicated that he would eliminate both federal income taxes and payroll taxes, which fund Social Security and Medicare.

Virtually all tipped workers would get some tax relief if Trump also gets rid of payroll taxes on tips, the Tax Policy Center found. However, these workers would then get smaller Social Security payments after they retire.

Seeking to appeal to senior citizens, a dedicated voting bloc, Trump has vowed that Social Security recipients would no longer have to pay taxes on the monthly benefits they receive. Around half of beneficiaries – mainly those with higher incomes – pay federal income tax on their Social Security payments.

In addition, Trump has proposed jettisoning taxes on overtime pay, though his campaign has not provided any details. However, if workers don’t owe payroll taxes on their overtime compensation, they could receive less from Social Security in retirement.

If enacted, all three of these measures could reduce the taxes that help fund Social Security, which could deplete the program’s trust funds by 2031 and force a roughly 30% cut in benefits for enrollees if the revenue is not replaced, according to the Committee for a Responsible Federal Budget.

Trump has also floated ending the federal income tax and replacing it with revenue from tariffs.

Help the middle class

The former president unveiled on the campaign trail several measures aimed at helping Americans afford the cost of living.

He has said he would temporarily cap credit card interest rates at around 10%, which is less than half the current rate.

And Trump promised to make the interest paid on car loans fully tax deductible, similar to the po[CENSORED]r existing deduction for mortgage interest. While he argues this will stimulate car ownership, some experts say it will mainly help wealthier Americans who itemize their deductions – and who typically buy more expensive cars.

To assist aging seniors and their family members, Trump has said he would push for a tax credit for family caregivers. Also, he would shift resources to at-home care and end disincentives that lead to care worker shortages, according to his platform.

Trump’s running mate, Ohio Sen. JD Vance, has floated beefing up the child tax credit to $5,000 per child, but the president-elect has not formally adopted that idea.

https://edition.cnn.com/2024/11/06/politics/heres-what-trump-is-proposing-for-the-economy/index.html