Trump Unveils New Tax Proposal Targeting Middle-Class Relief and Loopholes

White House Press Secretary Karoline Leavitt announced President Donald Trump’s latest tax plan aimed at easing financial pressure on middle-class Americans while closing loopholes benefiting the wealthy. The ambitious proposal removes federal taxes on tips, Social Security benefits, and overtime pay, measures designed to increase take-home pay for service workers, retirees, and employees working extra hours.

This plan arrives amid ongoing concerns about inflation and economic uncertainty. Trump’s team argues these changes will directly help those most affected financially, particularly service industry workers and seniors on fixed incomes. However, critics warn the plan’s broader tax cuts may primarily benefit corporations and the wealthy.

Key Elements of the Proposal:

• Eliminating Taxes on Tips, Social Security, and Overtime Pay: Intended to boost income for restaurant workers, retirees, and overtime earners, this move aims to provide immediate relief for many Americans.

• Closing the Carried Interest Loophole: The proposal targets hedge fund managers and private equity executives, aiming to tax investment gains at higher rates, leveling the field for average workers.

• Extending the 2017 Tax Cuts and Jobs Act (TCJA): Trump seeks to continue the individual and corporate tax cuts set to expire in 2025, arguing expiration would hurt households and businesses.

• Lowering Corporate Tax Rate to 15%: Further reducing corporate taxes from 21% to 15% is intended to stimulate investment and job growth, though critics worry it may increase wealth inequality.

Economic Impact and Political Debate

Supporters say the plan puts more money in workers’ pockets, encourages business growth, and addresses unfair tax loopholes. Opponents caution it could increase the national deficit and disproportionately favor the wealthy without clear revenue replacement.

Democrats have condemned the proposal as a giveaway to the rich, while Republicans remain divided, balancing tax relief enthusiasm with concerns over fiscal responsibility.

With Congress divided and the 2026 midterms looming, the proposal faces a challenging path forward. The debate will test lawmakers’ ability to deliver meaningful tax reform amid intense partisan divisions.