Here’s what Trump is proposing for the economy
By Katie Lobosco and Tami Luhby, CNN
Washington (CNN) — President-elect Donald Trump on the campaign trail laid out a broad array of ideas aimed at providing tax relief, cutting prices, hiking tariffs and strengthening the economy, which ranks at the top of voters’ concerns.
Nearly all of the measures, which lack detail, would require congressional approval. That could be tough to achieve in the partisan climate on Capitol Hill.
Here’s what you need to know about what Trump has said he’ll do to address the economy:
Tackle expiring tax cuts
Some parts of the 2017 Tax Cuts and Jobs Act, one of Trump’s signature achievements during his time in the White House, are scheduled to lapse 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 cuts that the 2017 law provided. This includes, among other things, an increase to the standard deduction, lower marginal income tax rates for most income brackets, and an increase to the estate tax exemption.
Trump has suggested he would get rid of the cap on state and local tax deductions, known as SALT. The TCJA limited the deduction to $10,000, but the controversial cap expires at the end of 2025.
Additionally, Trump has called for lowering the corporate tax rate to 15% for certain companies. The TJCA permanently lowered the top corporate tax rate from 35% to 21%.
Trump would also restore companies’ ability to immediately deduct investments in equipment and research.
Eliminate taxes
The president-elect has rolled out a series of targeted tax breaks, including eliminating federal taxes on tips, Social Security benefits and overtime pay.
Trump has promised an end to taxes on tips. Though his campaign hasn’t released details on the proposal, Trump has indicated that 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 then get smaller Social Security payments after they retire.
Seeking to appeal to senior citizens, a dedicated voting bloc, Trump has vowed that Social Security recipients would no longer have to pay taxes on the monthly benefits they receive. Around half of beneficiaries – mainly those with higher incomes – pay federal income tax on their Social Security payments.
In addition, Trump has proposed jettisoning taxes on overtime pay, though his campaign has not provided any details. However, if workers don’t owe payroll taxes on their overtime compensation, they could 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 roughly 30% cut in benefits for enrollees if the revenue is not replaced, according to the Committee for a Responsible Federal Budget.
Trump has also floated ending the federal income tax and replacing it with revenue from tariffs.
Help the middle class
The former president unveiled on the campaign trail several measures aimed at helping Americans afford the cost of living.
He has said he would 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 argues 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 assist aging seniors and their family members, Trump has said he would push for a tax credit for family caregivers. Also, he would shift resources to at-home care and end disincentives that lead to care worker shortages, according to his platform.
Trump’s running mate, Ohio Sen. JD Vance, has floated beefing up the child tax credit to $5,000 per child, but the president-elect has not formally adopted that idea.
Boost tariffs and trade
Trump has said that, if elected again, he will impose an across-the-board tariff of either 10% or 20% on every import coming into the US, as well as a tariff upward of 60% on all Chinese imports.
He’s also floated a 100% or 200% tariff on cars made in Mexico or on the products made by companies that move manufacturing from the US to Mexico.
Trump claims that tariffs will boost American manufacturing, create jobs and bring in billions of dollars to help pay for other policy initiatives – like tax cuts.
But it’s unlikely the revenue generated from new tariffs would fully cover his spending proposals. The duties would also likely raise prices on American consumers. Trump, for years, 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.
Cut prices
The former president repeatedly blasted the Biden-Harris administration for the surge in prices in recent years. He has promised to reverse course and lower the prices of gas, groceries and other essentials, though he hasn’t provided many details on how he’d accomplish that.
Trump has repeatedly said he will bring down prices by boosting oil and gas production. He’s vowed to allow for more drilling and reduce regulations. But those efforts 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 rescind unspent funds under the Inflation Reduction Act, a milestone climate law backed by the Biden administration, as well as to 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.
Make housing more affordable
The president-elect has not rolled out a formal housing proposal but has talked on the campaign trail about ways he’d help homeowners.
Trump has promised to make housing more affordable and to boost supply by getting rid of regulations that increase costs and by opening up some federal land available for large-scale housing construction.
He has also said falling interest rates will send mortgage rates down to 3% or even lower, which will make financing less expensive for homebuyers. (However, presidents don’t control interest rates.)
Trump has also blamed undocumented immigrants for driving up the cost of housing, which he would address through mass deportations and by banning them from getting mortgages.
The platform of the Republican Party also notes that it would “promote homeownership through Tax Incentives and support for first-time buyers.”
Invest in US businesses
The former president has said that his plans to increase tariffs and cut the corporate tax rate will result in a boom in American manufacturing.
He has said he will impose tariffs on companies that move manufacturing from the US to another country and, in September, specifically threatened John Deere with tariffs if the company doesn’t abandon plans to move some production from the Midwest to Mexico.
The idea is that tariffs will make foreign-made goods more expensive compared with those made in the US. But prices can go up for US manufacturers too if they need to import certain parts. And there will likely be retaliatory tariffs imposed by other countries, making it harder for US companies to sell goods abroad. In 2019, Federal Reserve economists found that Trump’s earlier tariffs led to a net decrease in manufacturing employment.
In September, he called his proposal to reduce the corporate tax rate to 15% for companies that make products in the US the “centerpiece” of his plan for a manufacturing renaissance.
Make health care more affordable
While health care was a main focus of Trump’s first term – when he unsuccessfully tried to repeal the Affordable Care Act and issued multiple executive orders and proposals aimed at reducing drug prices – the president-elect is not placing the same emphasis on the issue during this campaign.
He has alternated between saying he would like to try again to repeal Obamacare and replace it with a better program. When pressed at a September debate, Trump said he had “concepts of a plan.”
Vance sought to fill in some of the details in interviews in September. After initially indicating support for separating healthy and sicker Obamacare enrollees into different risk pools, which could threaten the law’s protections for those with preexisting conditions, he later backed off that view. In October’s vice presidential debate, he said he supports federal approval of state reinsurance programs, which have generally lowered Obamacare premiums by providing funding for insurers that enroll many high-cost patients.
This story has been updated with additional information.
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