Donald Trump’s tax reform plan could exempt roughly 93.2 million Americans, or just under half of the U.S. electorate, from part of their income taxes. The Republican nominee has proposed eliminating taxes on tips and Social Security benefits. Trump also said he would think about exemptions for firefighters, police, and military personnel, according to CNBC.
Trump plans to transition away from the income tax system and replace it with the revenue he expects to generate from his hardline tariff proposals. His tariffs would cause American companies to pay extra for imports. He pledged to impose a 20% universal tariff on all imports from all countries. This includes a specific 60% rate for Chinese imports.
“In the old days when we were smart, when we were a smart country, in the 1890s and all, this is when the country was relatively the richest it ever was. It had all tariffs. It didn’t have an income tax,” Trump said at a sit-down with voters on Friday for “Fox & Friends.” “Now we have income taxes, and we have people that are dying.”
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Roughly 68 million Americans receive Social Security benefits each month, according to the Social Security Administration. In 2023, about 4 million workers were in tipped jobs, according to an estimate from Yale University’s Budget Lab.
Altogether, Trump’s tax proposals would reduce federal tax revenue by an estimated $3 trillion from 2025 to 2034. This estimate comes from the nonpartisan Tax Foundation. These proposals are extreme, to say the least, but would likely receive little support from the House of Representatives. Republicans currently control the House with a razor-thin margin. Control of the chamber will depend on the outcome of some districts in November and the future of Donald Trump’s tax plan.
