Here’s what Trump is proposing for the economy

Washington
CNN
—

President-elect Donald Trump on the campaign trail presented a wide range of ideas aimed at making life more affordable and strengthening the economy, which rank at the top of voters’ concerns.

Almost all of the measures, which lack details, would require congressional approval. That could be difficult to achieve in the partisan climate on Capitol Hill.

Here’s what you need to know about what Trump has said he will do to fix the economy:

Some parts of the 2017 Tax Cuts and Jobs Act, one of Trump’s signature accomplishments during his time in the White House, are scheduled to expire at the end of 2025.

While the law reduced taxes for most people, Democrats often criticize the TCJA for disproportionately benefiting the wealthy.

Trump wants to extend all the individual income and estate tax breaks that the 2017 law provided. This includes, among other things, an increase in the standard deduction, lower marginal tax rates for most income groups and an increase in the estate tax exemption.

Trump has proposed that he would get rid of the cap on state and local tax credits, known as SALT. The TCJA limited the deduction to $10,000, but the controversial cap expires at the end of 2025.

In addition, Trump has called for lowering the corporate tax rate to 15% for certain companies. TJCA lowered permanently highest corporate tax rate from 35% to 21%.

Trump would also restore the ability for companies to immediately deduct investments in equipment and research.

The president-elect has rolled out a series of targeted tax cuts, including eliminating federal taxes on tips, social security benefits and overtime pay.

Trump was the first candidate to promise an end to the tip tax, floating it at a rally in Las Vegas about two months earlier than Democratic presidential nominee Kamala Harris. Although his campaign has not released details of the proposal, Trump has indicated he would eliminate both federal income taxes and payroll taxes, which fund Social Security and Medicare.

Virtually all tipped workers would get some tax relief if Trump also gets rid of payroll taxes on tips, the Tax Policy Center found. However, these workers would receive smaller Social Security payments after they retired.

In an effort to appeal to senior citizens, a dedicated voting bloc, Trump has promised that Social Security recipients will no longer have to pay taxes on the monthly benefits they receive. About half of recipients—mainly those with higher incomes—pay federal income tax on their Social Security payments.

In addition, Trump has proposed dropping taxes on overtime pay, though his campaign has not provided any specifics. But if workers don’t owe payroll taxes on their overtime compensation, they may receive less from Social Security in retirement.

If enacted, all three of these measures could reduce the taxes that help fund Social Security, which could deplete the program’s trust funds by 2031 and force a cut of about 30% in benefits for enrollees if income is not replaced, according to the Committee for a Responsible Federal Budget.

Trump has also floated plans to end the federal income tax and replace it with revenue from tariffs.

The former president unveiled several measures on the campaign trail aimed at helping Americans afford the cost of living.

He has said he will temporarily cap credit card interest rates at around 10%, which is less than half the current rate.

And Trump promised to make the interest paid on car loans fully tax-deductible, similar to the popular existing deduction for mortgage interest. While he claims this will stimulate car ownership, some experts say it will mainly help wealthier Americans who itemize their deductions — and who typically buy more expensive cars.

To help aging seniors and their family members, Trump has said he would push for a tax credit for family caregivers. He would also shift resources to home care and end the incentives that lead to a shortage of care workers, according to his platform.

Trump’s running mate, Ohio Sen. JD Vance, has increased the child tax credit to $5,000 per child, but the president-elect has not formally adopted that idea.

Increase rates and trade

Trump has said that if re-elected, he would impose a blanket tariff of either 10% or 20% on every import coming into the US, as well as a tariff of upwards of 60% on all Chinese imports.

He has also applied a 100% or 200% tariff on cars made in Mexico or on products made by companies that move production from the US to Mexico.

Trump claims tariffs will boost American manufacturing, create jobs and bring in billions of dollars to help pay for other policy initiatives — like tax cuts.

But the revenue from new rates is unlikely to fully cover his spending proposals. The tariffs are also likely to raise prices for American consumers. For years, Trump has inaccurately claimed that foreign countries pay the tariffs. They are paid by importers based in the US.

Separately, Trump has said he will renegotiate the USMCA trade deal his own administration struck with Mexico and Canada.

The former president has repeatedly blasted Harris for the price hike in recent years. He has promised to reverse course and lower the prices of gas, groceries and other essentials, though he hasn’t given many details on how he would accomplish that.

Trump has repeatedly said he will bring down prices by increasing oil and gas production. He has promised to allow more drilling and reduce regulations. But that effort may have a limited effect on prices at the pump, which in the US are highly dependent on the global oil market.

Trump has also promised to revoke unused funds under the Inflation Reduction Act, a landmark climate bill backed by the Biden-Harris administration, as well as create a new efficiency commission to conduct a financial and performance audit of the federal government. He said in September that tech billionaire Elon Musk has agreed to lead the commission.

The president-elect has not rolled out a formal housing proposal, but has spoken on the campaign trail about ways he can help homeowners.

Trump has promised to make housing more affordable and to increase supply by getting rid of regulations that drive up costs and by opening up some federal land for large-scale housing construction.

He has also said that falling interest rates will send mortgage rates down to 3% or even lower, making financing cheaper for homebuyers. (However, presidents do not control interest rates.)

Trump has also blamed undocumented immigrants for driving up housing costs, which he would address through mass deportations and by banning them from getting mortgages.

The Republican Party platform also notes that it would “promote homeownership through tax incentives and support for first-time buyers.”

The former president has said his plans to raise tariffs and cut corporate taxes will result in a boom in American manufacturing.

He has said he will impose tariffs on companies that move production from the US to another country, and in September he specifically threatened John Deere with tariffs if the company does not abandon plans to move some production from the Midwest to Mexico.

The idea is that tariffs will make foreign-made goods more expensive compared to those made in the United States. But prices could also rise for American manufacturers if they have to import certain parts. And there will likely be retaliatory tariffs imposed by other countries, making it more difficult for American companies to sell goods abroad. In 2019, Federal Reserve economists found that Trump’s previous tariffs led to a net decline in manufacturing employment.

In September, he called his proposal to cut the corporate tax rate to 15% for companies that make products in the U.S. the “centerpiece” of his plan for a manufacturing renaissance.

While health care was a major focus during Trump’s first term in office — when he unsuccessfully tried to repeal the Affordable Care Act and issued several executive orders and proposals aimed at reducing drug prices — the president-elect is not placing the same emphasis on the issue this time around. campaign.

He has alternated between saying he would like to try again to repeal Obamacare and replace it with a better program. When pressed during a debate in September, Trump said he had “concepts about a plan.”

Vance sought to fill in some of the details at rallies last month. After initially expressing support for separating healthy and sick Obamacare enrollees into different risk pools, which could threaten the law’s protections for those with pre-existing conditions, he later backed that view. In an October debate he said he supports federal approval of state reinsurance programs, which have generally lowered Obamacare premiums by providing funding to insurers that attribute high-cost patients.