President-elect Trump could put more money in Americans’ pockets with a raft of tax code changes, insiders and experts said.
On the campaign trail Trump repeatedly promised to slash taxes on tips and social security benefits, and suggested the total elimination of income taxes with the hope or replacing the revenue with tariffs.
With the signature tax cuts of Trump’s first term set to expire in 2025, and the high likelihood Republicans will have full control of Congress, extending and even expanding tax changes are high on his agenda.
Chief among the wish-list items of an expanded tax cut program would be lowering corporate tax rates.
President-elect Donald Trump has an ambitious tax plan. AP
Tax reduction advocate Grover Norquist discusses zero and flat income tax states during a panel discussion at the 2024 Policy Summit on tax reform. Barbara Gauntt/Clarion Ledger / USA TODAY NETWORK via Imagn Images
In 2027, Trump slashed the corporate tax rate from 35% to 21% — and now wants to bring it down even more to 15%.
“When you reduce the corporate rate by 2% wages go up 1%, corporations have more money to invest for workers,” Grover Norquist, and activist and president of Americans for Tax Reform, told The Post.
Norquist, a longtime insider in GOP tax circles, said he expected House and Senate leadership would be completely on board with the reduction.
Trump has also promised to walk back a product of his 2017 tax law: the $10,000 cap on state and local tax deductions, known as SALT.
Alexandria Ocasio-Cortez has blasted past efforts to remove the SALT cap as a “gift to billionaires.” AP
The cap overwhelmingly targets residents of high-tax blue states where soaring state and local taxes support bloated state bureaucracies, and Trump’s promise to repeal it has the potential to be an early bipartisan win.
“I take President Trump at his word and will hold him accountable for his promise to eliminate the SALT cap. I will work with him and anyone to get things done on behalf of the people,” said Long Island Democratic Rep. Tom Suozzi, an avowed enemy of the cap.
Insiders, however, say the repeal will be a significantly heavier lift.
Trump’s first round of his tax plan will expire in 2025. Damon Higgins/PALM BEACH DAILY NEWS / USA TODAY NETWORK via Imagn Images
“The major problem is it pits high tax states against low tax states. Certain states like New York and California and New Jersey have really high and state and local tax rates, and it gives people who live there an advantage in their deductions over people who live in [low-tax] places like Florida or Texas,” said Phil Magness, an economic historian at the Independent Institute.
Far-left progressives may also find themselves loathe to support what amounts to a tax cut for the rich. Socialist Squad Rep. Alexandria Ocasio-Cortez has blasted past efforts to remove the SALT cap as a “gift to billionaires.”
Norquist said he wasn’t so sure Trump could get the cap totally lifted, but that raising the deduction could be a compromise solution.
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