Trump's Tax Cut Tour: Aiming to Win Voters with More Deductions
Former President Trump has been making a series of tax cut promises to voters in different states, aiming to win their support. During a speech at the Detroit Economic Club in Michigan, Trump pledged to make interest on car loans fully tax-deductible, a move that could greatly benefit the automobile industry in Michigan and beyond.
Trump's Tax Proposals
Trump has been making tax cut promises to voters in various states. In Nevada, he pledged to eliminate taxes on tips, and later in the fall, he promised to restore the state and local tax deduction, a key tax deduction that he and congressional Republicans eliminated during his presidency. If restored, this would benefit suburban voters in states like New York, New Jersey, and California. Trump has also proposed making Social Security benefits tax-free, which would primarily benefit seniors.
Targeting Overseas Americans
Trump also expressed his support for ending the double taxation of overseas Americans, referring to his plan to lower the tax burden for the small number of citizens who pay both federal taxes and taxes to the foreign government where they reside. This move is seen as an attempt to win the support of a frequently overlooked group of voters.
Response to Trump's Tax Proposals
Trump's tax proposals have been met with some criticism. Brian Riedl, a senior fellow at the Manhattan Institute, a center-right think tank, described Trump's approach as "throwing darts at the populist-pandering dart board." Meanwhile, Vice President Kamala Harris has also proposed a similar "no tax on tips" proposal, which has led to accusations of her playing "copy-cat."
Harris's Tax Proposal
Harris's proposal differs from Trump's in that she supports eliminating taxes on tips only for those making under $75,000 and would pair that reform with legislation boosting the minimum wage for tipped workers from $2.13 an hour to $7.25. She has also criticized Trump’s tariff proposal as “a sales tax on the American people.”
Trump's Focus on Blue-Collar Voters
Indiana Rep. Jim Banks sees a common thread in Trump's proposals: a focus on blue-collar voters. He believes that Republicans on Capitol Hill should follow Trump’s lead “and give middle-class families a tax break by making the TCJA’s individual rate cut permanent before the end of next year.”
Delivering on Tax Promises
Promises are easy to make during election season, but the real challenge lies in implementing them once in office. When asked how Trump would replace revenue lost to tax cuts, his spokeswoman Karoline Leavitt referred to his track record rather than any specific legislative strategy. Trump has claimed that income from new tariffs would make up the federal revenue lost by tax cuts.
Fiscal Responsibility and the National Debt
The Committee for a Responsible Federal Budget estimates that Trump’s plans could add as much as $15 trillion to the national debt over a decade, while Harris’ proposals would add nearly $8 trillion. No president from either party since Bill Clinton has taken the national debt and annual budget deficits seriously.
Trump's Understanding of Tax Policy
Paul Winfree, former deputy director of the Domestic Policy Council under Trump, believes that the former president “understands something important that all the tax nerds do not.” Despite criticism from policy wonks, Winfree argues that Trump realizes “that you will pay a price for taking away benefits that people currently have, but that you’re not rewarded for allowing people to keep what they have either.”
Bottom Line
With the election less than a month away, Trump's tax cut promises are a significant part of his campaign strategy. Whether or not these promises can be delivered upon will be a crucial factor in determining his success. What are your thoughts on these tax proposals? Do you think they will have the intended effect, or will they lead to more financial strain in the long run? Share your thoughts and consider signing up for the Daily Briefing, which is delivered every day at 6pm.
