Trump’s proposed tax reforms could exempt approximately 93.2 million Americans, nearly 38% of eligible U.S. voters, from paying income taxes. The plan seeks to eliminate taxes on tips, Social Security benefits, and could potentially extend exemptions to firefighters, police officers, and military personnel.
To make up for the lost income tax revenue, Trump suggests imposing a 20% universal tariff on all imports and a 60% tariff on Chinese goods. This significant shift aims to reduce the tax burden on individuals, but it comes with concerns. Economists warn that replacing income tax revenue with tariffs might not be feasible. The Tax Foundation projects a potential federal revenue loss of $3 trillion from 2025 to 2034 under this plan.
While this proposal could provide relief for millions of Americans, relying on tariffs to fill the gap raises questions about higher consumer prices and trade tensions. The long-term economic effects of this approach are still up for debate.
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