What to Expect from Trump’s Tax Policy in His Return to the White House

Donald Trump’s renewed economic agenda highlights a focus on tax cuts, deregulation, and strategies to bolster U.S. business interests.

| Image Credits: 47th President of the United States, Donald Trump

As Donald Trump returns to the White House, his proposed economic policies are expected to reflect familiar priorities: substantial tax cuts, deregulation, and incentives aimed at strengthening the business landscape. Trump’s approach favors corporations and high-income earners, and he argues that these measures will fuel economic growth. Here’s a breakdown of the major components of Trump’s economic plan.

CORPORATE TAXATION

Proposal: Reduce the Corporate Tax Rate to 15%

Trump aims to further cut the corporate tax rate, potentially lowering it from 21% to 15%. By reducing the tax burden on businesses, he hopes to incentivize corporations to invest, create jobs, and boost economic growth domestically. His plan builds upon the Tax Cuts and Jobs Act of 2017, which initially reduced corporate taxes and underscores his pro-business stance.

Proposal	Trump’s Plan
Corporate Tax Rate	Reduce to 15%
Target Beneficiaries	Corporations, high-income earners

INDIVIDUAL TAX RELIEF

Proposal: Eliminate Federal Income and Payroll Taxes on Tips

Trump is expected to continue his push for tax relief in the service industry by eliminating federal income taxes on tips. Additionally, he proposes eliminating federal payroll taxes on tips, potentially easing the financial burden for service workers and increasing their take-home pay.

Proposal	Trump’s Plan
Eliminate Federal Income Taxes on Tips	Yes
Eliminate Federal Payroll Taxes on Tips	Yes

SOCIAL SECURITY TAX REFORM

Proposal: End Taxes on Social Security Benefits

In a move expected to appeal to retirees, Trump has pledged to eliminate taxes on Social Security benefits, which could provide relief to middle- and upper-income seniors. However, this proposal could accelerate the depletion of the Social Security and Medicare trust funds, raising concerns about the long-term fiscal impact.

Proposal	Trump’s Plan
Eliminate Taxes on Social Security Benefits	Yes

MIDDLE-CLASS TAX CUTS AND CREDITS

Proposal: Extend 2017 Tax Cuts and Enhance Middle-Class Tax Credits

Trump’s strategy leans towards maintaining and potentially expanding the 2017 tax cuts. He sees extending these cuts for individuals and businesses as key to promoting economic growth and sustaining middle-class support.

Proposal	Trump’s Plan
Extend 2017 Tax Cuts	Yes
Enhance Middle-Class Tax Credits	No

INFLATION AND COST OF LIVING

Proposal: Deregulation and Increased Energy Production

Trump’s approach to inflation focuses on reducing regulatory burdens and boosting domestic oil and gas production. He argues that by cutting regulations and increasing energy independence, consumer prices could stabilize, benefitting households and businesses alike.

Proposal	Trump’s Plan
Deregulation to Reduce Prices	Yes
Increase Oil and Gas Production	Yes

TRADE AND TARIFFS

Proposal: New Tariffs on Imports, Especially from China

Trump has signaled his intention to reinstate and possibly broaden tariffs, including a proposed 20% tariff on all imports and a 60% tariff on Chinese goods. This protectionist stance aims to boost U.S. manufacturing and job creation, though it could increase prices on imported goods.

Proposal	Trump’s Plan
New Tariffs on Imports	Yes
Broad Tariffs on Chinese Imports	Yes

AFFORDABLE HOUSING AND INFRASTRUCTURE

Proposal: Federal Land for New Housing Development

To address housing shortages, Trump has floated the idea of using federal land for new housing construction, aiming to ease the housing crisis, although details remain limited compared to more comprehensive proposals.

Proposal	Trump’s Plan
Federal Land for New Housing	Yes
Specific New Housing Units	Not specified

SUMMARY

This table highlights key components of Trump’s tax and economic policy:

Proposal	Trump’s Plan
Corporate Tax Rate	Reduce to 15%
Eliminate Federal Income Taxes on Tips	Yes
Eliminate Federal Payroll Taxes on Tips	Yes
Eliminate Taxes on Social Security Benefits	Yes
Extend 2017 Tax Cuts	Yes
Deregulation to Reduce Prices	Yes
Increase Oil and Gas Production	Yes
New Tariffs on Imports	Yes
Broad Tariffs on Chinese Imports	Yes
Federal Land for New Housing	Yes

Trump’s tax and economic policies prioritize business interests, deregulation, and protections for certain worker groups, presenting a distinct vision for the U.S. economy that appeals to corporations and higher-income earners.