You want to keep more of what you earn. You work hard for your money and surely know how to spend it better than any government ever could. So you are undoubtedly concerned about the future of tax policy in the United States. After Donald Trump’s landslide win over Kamala Harris in Tuesday’s presidential election, it’s worth taking another look at what he has planned for America’s tax policy. At the Tax Foundation, Erica York, Garrett Watson, Alex Durante, and Huaqun Li discuss Trump’s proposals on taxes throughout the campaign. They write:
Trump has suggested a wide variety of tax and tariff proposals and frequently proposes new ideas on the campaign trail. For this update of our details and analysis on Trump’s tax policies, we model the following major proposals, effective beginning January 1, 2025, unless otherwise stated:
- Making the individual TCJA expirations permanent except for the cap on SALT (effective January 1, 2026)
- Rates and brackets
- Standard deduction
- Personal exemption
- Child tax credit and other dependent tax credit
- Limitations on itemized deductions (excluding SALT) and elimination of Pease limitation
- AMT changes
- Section 199A pass-through deduction and noncorporate loss limitation
- Making the TCJA estate tax changes permanent (effective January 1, 2026)
- Restoring the TCJA business tax provisions (effective January 1, 2026)
- 100 percent bonus depreciation
- R&D expensing
- EBITDA-based interest limitation
- Reinstituting the domestic production activities deduction (DPAD) at 28.5 percent to lower the effective corporate tax rate for domestic production to 15 percent
- Exempting tips from income taxes
- Exempting Social Security benefits from income taxes
- Exempting overtime pay from income taxes
- Creating an itemized deduction for auto loan interest
- Eliminating the green energy subsidies in the Inflation Reduction Act (IRA)
- Raising current Section 301 tariffs on China to 60 percent
- Imposing a universal tariff on all US imports of 20 percent
- Foreign retaliation of 10 percent on all US exports plus additional in-kind tariffs on US exports to China
We exclude from our formal modeling an idea floated by vice presidential candidate Sen. JD Vance (R-OH) to increase the child tax credit to $5,000—as the campaign has not confirmed support of the proposal—as well as Trump’s recent proposal to end double taxation of Americans abroad, though we include the potential cost of both policies in our range of potential budgetary estimates below. We also exclude the proposal to create a tax credit for family caregivers, as the campaign has not specified a design.
Action Line: You know best what your money should be used for. Keep an eye on what the Trump administration and Congress are doing regarding taxes. Click here to subscribe to my free monthly Survive & Thrive letter.
