During his campaign for a second term, former president Donald Trump has proposed a string of tax giveaways: He has suggested \u201cno tax on tips,\u201d an idea he said he heard from a waitress in Nevada. He has declared that no one, regardless of income, should have to pay taxes on Social Security benefits or income earned working overtime hours. <\/p>\n
Most recently, he called for making car-loan interest payments tax-deductible and said he doesn\u2019t want Americans living abroad to pay U.S. taxes.<\/p>\n
The slew of proposals have been popular with his supporters, and in some cases resonated outside Trump\u2019s political base: Vice President Kamala Harris has followed Trump in supporting a more limited tax exemption for tips. <\/p>\n
But Trump\u2019s ideas add up to a version of tax policy that offers little in the way of a coherent, overarching vision \u2014 especially in the eyes of conservative tax policy experts who had hoped that a second Trump administration would bring a complete overhaul of the American income tax structure.<\/p>\n
\u201cTrump has come up with these himself,\u201d said Stephen Moore, a Trump economic adviser and Heritage Foundation fellow who said he and others crafting tax plans have sometimes been surprised to hear the candidate announce ideas they never heard about. <\/p>\n
\u201cLook, he\u2019s the candidate. If he wins, he\u2019s going to be the president. We\u2019re all just advisers. \u2026 But he is a businessman and he does know how the economy works.\u201d<\/p>\n
Despite Trump\u2019s promotion of rewards and tax breaks for certain groups, Moore and another Heritage fellow, David Burton, said they think some ideas floated among conservatives \u2014 such as reducing the number of income tax brackets to just two \u2014 might still be on the table in a future Trump administration, if Republicans in Congress favor simplifying the tax code and Trump gets behind their plans.<\/p>\n
\u201cI think what you\u2019re going to see if Trump wins in 2025 is a wholesale review of the whole tax system,\u201d Moore said. \u201cIt will be one of those once-in-a-generation opportunities to potentially really clean out the whole tax system.\u201d<\/p>\n
If implemented, some of Trump\u2019s ideas could have significant impact on the federal government\u2019s finances. The Yale Budget Lab has estimated the cost of making car-loan interest deductible at up to $173 billion over 10 years, of not taxing tips at $107 billion over a decade, and of not taxing overtime at $866 billion over a decade. The Committee for a Responsible Federal Budget says that not taxing Social Security benefits would cost even more \u2014 more than $1.6 trillion over the next decade.<\/p>\n
Trump has also pledged to extend the tax cuts he oversaw in 2017, many of which are set to expire in 2025. Keeping that promise could mean giving up trillions in federal revenue, which could also appeal to conservatives who have long argued for shrinking the size of the U.S. government.<\/p>\n
But Trump\u2019s campaign trail rhetoric leaves some conservatives questioning whether broad reform of the tax system would ever be a goal under his administration.<\/p>\n
\u201cYou might call it an exemption approach, a targeted approach or a populist approach,\u201d Tax Foundation vice president William McBride said of Trump\u2019s promises. \u201cTax reform, in general, means to go back and remove all of these types of special preferences and exemptions \u2026 so this is really going in the opposite direction of what is commonly understood to be fundamental tax reform. I can\u2019t say I\u2019m a fan of it.\u201d<\/p>\n
Others said Trump might run on popular sound bites but endorse conservatives\u2019 broader plans if they get through Congress. \u201cI do think these one-off proposals just reflect him campaigning,\u201d American Enterprise Institute tax researcher Kyle Pomerleau said. \u201cHe would be willing to put his name on a large piece of legislation that reforms the tax code.\u201d<\/p>\n
Moore and Burton are two of the authors of a chapter on how to remake the tax system in the 900-page policy book compiled by the Heritage Foundation-led Project 2025. Trump has disavowed that effort, but Burton described the Project 2025 goal as nothing more than \u201cfairly conventional long-standing conservative and pro-market tax policy.\u201d Their chapter called for flattening tax brackets in the near future, which would raise taxes on low-income earners and reduce them for the rich. In the long run, the authors wrote, the United States should replace income taxes altogether with a tax on spending.<\/p>\n
\u201cIn principle, we would like to have a tax base that\u2019s loophole-free and that leads to less distortions and enables lower tax rates,\u201d said Burton, who is not advising Trump\u2019s campaign.<\/p>\n
Trump\u2019s ideas have veered away from the principles that experts have tried to advance for tax reform, said Brett House, an economics professor at Columbia Business School. \u201cIt\u2019s not really clear what the overarching goal would be of the proposals, beyond a sprinkling of really-hard-to-justify carve-outs that create false distinctions between one type of income and another,\u201d he said. \u201cThey\u2019re the kind of proposals that sound casually appealing \u2026 but what they could end up doing is massively increasing inequality and creating big loopholes for high-income earners.\u201d<\/p>\n
In some cases, Trump is directly contradicting his own prior policies \u2014 such as the question of capping deductions for state and local taxes. Trump\u2019s 2017 law capped such deductions at $10,000, and some Republicans have called for allowing no SALT deductions at all. Recently, Trump said the opposite: He would favor renewing unlimited SALT deductions.<\/p>\n
\u201cEventually, with a good tax system, you want a broad tax base and a low tax rate. That\u2019s one of the basic principles,\u201d Moore said, admitting that while he likes some of Trump\u2019s specific campaign-trail ideas, Trump seems to be moving in the opposite direction. \u201cI don\u2019t know the answer to this: Is Congress in the mood for doing smaller things like Trump is talking about which are helping isolated groups? Or will President Trump, if he gets reelected, go for the gold and go for a rewrite of the whole tax system consolidating the brackets and lowering the rates?\u201d<\/p>\n<\/p>\n
During his campaign for a second term, former president Donald Trump has proposed a string of tax giveaways: He has suggested \u201cno tax on tips,\u201d an idea he said he heard from a waitress in Nevada. He has declared that no one, regardless of income, should have to pay taxes on Social Security benefits or […]<\/p>\n","protected":false},"author":0,"featured_media":11308,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-11307","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics"],"_links":{"self":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/11307","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/comments?post=11307"}],"version-history":[{"count":0,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/posts\/11307\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media\/11308"}],"wp:attachment":[{"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/media?parent=11307"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/categories?post=11307"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstriumphs.com\/index.php\/wp-json\/wp\/v2\/tags?post=11307"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}