Trump Dangles New Tax Cut Proposals With Real Political Appeal

During his second bid for office, he made some extreme promises on tax cuts as a way to reinvigorate his voting base to support him in November. First, it was a large tax cut for hotel and restaurant employees in Nevada, a key swing state. Then, he suggested cutting the corporate tax rate which would appeal to his colleagues in the business community that he often relied on for favors and validation.

To curry their favor, Trump has suggested ending the tax on Social Security benefits. This move could be a huge bid for retirees and seniors, which is one of the most politically active groups in the United States.

Although no formal policies have actually been outlined, Trump has now called for a reduction in trillions of dollars in revenue. In the same breath, he has also promised to reduce the national debt by billions, which he previously added more than $8 trillion to during his first term alone.

“You do have to scratch your head a little bit when someone’s going around offering free lunches everywhere,” explained Jesse Lee, a Democratic consultant and former Biden White House official. “We’re all for people having their lunch, but we have to raise taxes on the wealthy to pay for it.”

If Trump gets his way and cuts taxes on Social Security benefits, the federal government will lose more than $1.8 trillion in revenue over the course of a decade according to the Committee for a Responsible Federal Budget.

In the 1980s, Congress passed a bill to tax Social Security benefits, which had previously been untaxed. Now, about 40% of people who receive Social Security payments owe taxes on the benefits. Right now, around 70 million people receive the benefits.

Any person making more than $25,000 has to pay taxes on 50% of their benefits. As well, people making more than $34,000 pay 85% of their benefits.

However, the proposed tax cut will likely boost the income of people who are already making a healthy income. Households currently making between $60,000 and $200,000 will receive the biggest boost under the proposed tax cut.

Romina Boccia, the budget and entitlement policy director at the libertarian Cato Institute, notes that ending the tax will shift the burden to younger workers. When one tax ends, a new, higher tax is likely to take its place. “I can see the political calculations behind this proposal, but from a tax fairness perspective and a generation fairness perspective, it is a very bad proposal,” she said.

Democrats also agree that low-income seniors do not need to be taxed on Social Security benefits that they already paid into throughout their careers.

He signed legislation that removed Social Security payments from state taxes for many seniors. He has often been favored among the people of this state for his progressive choices that save money for low—and middle-class people.

Under Trump’s new tax law, more high-wage earners, over $400,000 per year, and corporate entities would pay fewer taxes. However, Harris promised the opposite by pledging to not raise taxes on those who make less than $400,000 per year, a similar policy instituted by President Joe Biden.