In a major economic move, White House Press Secretary Karoline Leavitt has unveiled President Donald Trump’s new tax proposal, designed to deliver relief to middle-class Americans. The plan targets federal taxes on tips, Social Security benefits, and overtime pay, aiming to increase take-home income for service workers, retirees, and employees working extended hours. The proposal is already stirring debate in Washington due to its scope and potential economic implications.
The proposal emerges as inflation, lingering pandemic effects, and financial strain continue to burden U.S. households. Trump’s team claims the tax cuts will directly support blue-collar workers and seniors. However, critics argue the broader plan could disproportionately benefit corporations and high-income earners, undermining its middle-class focus.
Key components include eliminating federal taxes on tips, which would notably assist workers in hospitality and personal service industries. Social Security income would also become tax-free, offering meaningful relief to retirees. These provisions are being marketed as transformative changes to working-class financial well-being.
Trump also seeks to extend and expand elements of his 2017 Tax Cuts and Jobs Act (TCJA), which lowered individual and corporate tax rates. Notably, his new plan proposes cutting the corporate tax rate further—from 21% to 15%—to stimulate investment and prevent job offshoring. Opponents warn this move could widen the wealth gap, benefiting large corporations over average workers.
With midterm elections approaching and a divided Congress, the proposal faces a challenging legislative path. The debate is expected to dominate economic discourse, with both parties leveraging it as a major political issue in the months ahead.
