Donald Trump likes to talk about taxes. Specifically, he likes to talk about the many ways he plans to lessen the tax burdens of millions of Americans through extensive, and often conflicting, tax policies. And as with most policies Trump pushes, his tax policies benefit the ultra-wealthy while doing little to help the rest of us.
Previously, Trump overhauled the tax system and has promised even more tax reform this time around. He’s pledged support for ending taxes for expats and overtime workers, as well as making some big claims regarding the tariffs he wants to impose on other countries. Does he really have a plan — or “concepts of a plan” — or was he just blowing more hot air on the campaign trail?
Trump’s concepts of a tax plan
During his first term as president, Trump introduced the Tax Cuts and Jobs Act, a 2017 law that gave basically all taxpayers a tax break, but especially benefited the most affluent taxpayers. At the time, Trump promised the new law would increase middle-class workers’ incomes by $4,000 to $9,000. Where was this money coming from, you ask? Trump also reduced taxes on corporations from 35 percent to 21 percent, and the corporations were then to use their newly increased profits to increase workers’ wages, obviously. Stop trying to make trickle-down economics happen, Donald! It’s not going to work.
That law is gearing up to expire in late 2025. If an extension isn’t approved in time for the 2026 tax season, roughly 62 percent of tax filers will see an increase in their taxes, according to a report from the Tax Foundation. Make no mistake: The Tax Cuts and Jobs Act has increased income inequality by helping corporations and the wealthy become even richer, but tax rates will rise for basically every income bracket if provisions expire.
Republicans have the presidency, and a majority in the House and Senate. As a result, it’s likely that these provisions will be extended. Trump has also promised to eliminate Social Security tax, overtime tax, and taxes on tips. These tax breaks target working-class voters, but critics argue they do little to help the working class overall, including other workers with lower wages who don’t make tips. In fact, according to the Institute of Taxation and Economic Policy, Trump’s proposed tax policy changes and tariffs on imported goods will actually raise taxes for the majority of taxpayers. So who actually benefits from these tax policies? Only taxpayers who make over $360,000 a year — the top 5% — before taxes will actually pay less than before.
Trump talks big, but can he back it up? While his 2017 tax provisions have lowered tax rates for most taxpayers, they disproportionately benefit corporations and the wealthy, contributing to growing income inequality in the United States. According to research by the Journal of Economic Perspectives, the tax overhaul didn’t even live up to Trump’s claims it would boost the economy. And now, Trump’s already going back on promises to lower costs for American people, claiming it’s too “hard” to lower the price of groceries. Unless you’re in the highest tax brackets, don’t expect much from Trump’s tax plan.