former president Donald Trumpof tax reform The ideas could provide full or partial income tax exemptions to about 93.2 million Americans, or half of the U.S. electorate, according to a CNBC analysis of multiple estimates.
Trump lays out sweeping plan as part of economic pitch to voters tax reformincluding a range of income tax deductions.
So far, Republican presidential candidates have formally proposed canceling tip income tax and social security benefits, and overtime pay. Last week, in an interview with sports media website outside kickTrump said he would consider tax exemptions for firefighters, police officers, military personnel and veterans.
If implemented, these exemptions would impact tens of millions of taxpayers.
approximately 68 million According to the Social Security Administration, Americans receive Social Security benefits every month. By 2023, approx. 4 million According to estimates from the Yale Budget Lab, workers perform jobs that are tipped.
The U.S. Department of Veterans Affairs estimates that in March 2023 there will be 18.6 million Living veterans. have 1.3 million Active duty military personnel, according to the Department of Defense. besides 800,000 Sworn Law Enforcement Officers and General 500,000 Paid firefighters.
Altogether, these reforms could prevent some 93.2 million people from paying at least some, if not all, income taxes.
That represents about 38% of the 244 million Americans eligible to vote in 2024.
That total does not include the many more people who would be exempt from paying some income taxes if Trump follows through on his proposal to eliminate the tax. overtime pay.
The exemptions are part of Trump’s larger vision to ditch the income tax system and replace it with revenue he says hard-liners will generate. tariff proposal. Trump promised to impose a 20% general tariff on all imported products from all countries, including a 60% specific tariff on Chinese imports.
Given that tariffs are paid by U.S. importers and those costs have historically been passed on to consumers, Trump’s strategy could end up replacing the income tax with an invisible sales tax.
“In the past, when we were smart, when we were a smart country, in the 1890s and so on, this country was the richest it had ever been, relatively speaking. It had all the tariffs. It had no income tax,” Trump said. Trump said while sitting down with voters in New York on Friday that “fox and friends“Now we have an income tax and we have people dying.
Analysts believe Trump’s plan to eliminate income taxes is just a pipe dream.
“Spoiler alert: We don’t think tariffs will replace income taxes,” Evercore analysts wrote in a June note.
The Harris campaign did not immediately respond to CNBC’s request for comment on Trump’s proposed tax plan.
Trump’s proposed erosion of the income tax system comes as he also pledges to make permanent the 2017 tax cuts that are set to expire in 2025.
All told, Trump’s tax proposals would reduce federal tax revenue by estimate $3 trillion from 2025 to 2034, according to the nonpartisan Tax Foundation.
But even if Trump defeats Vice President Kamala Harris in the November election, his tax reform won’t materialize without a Republican majority in the House, where all tax bills originate.
Republicans currently control the House of Representatives by a slim margin. Control of the chamber will depend on the outcome of a handful of contested precincts in November.
