#TrumpTaxCuts
President Trump's latest tax cut proposals include ¹:
- *Permanent Extension of 2017 Tax Cuts*: Trump wants to make the Tax Cuts and Jobs Act (TCJA) permanent, which would decrease federal tax revenue by $4.5 trillion from 2025 to 2034. This would lead to a 1.1% increase in long-run GDP and a 2.9% increase in after-tax incomes.
- *New Tax Exemptions*:
- *No Taxes on Tips*: Exempting tips from income tax, which could boost take-home pay for service industry workers.
- *No Taxes on Overtime Pay*: Excluding overtime pay from income tax to incentivize work.
- *No Taxes on Social Security Benefits*: Eliminating taxes on Social Security benefits for retirees.
- *Auto Loan Interest Deduction*: Creating a deduction for auto loan interest on American-made cars to promote domestic auto sales.
- *Tariffs*: Implementing new tariffs on imports, which could offset some economic benefits of tax cuts and potentially lead to higher prices for consumers.
It's worth noting that some of these tax cuts, particularly the individual income tax cuts, are set to expire in 2025, and extending them would add to the national debt. Economists have expressed concerns that extending these cuts could boost inflationary pressures and worsen America's fiscal trajectory ².