Here's what Trump proposes for the economy

Washington
CNN
—

President-elect Donald Trump has laid out a wide range of ideas on the campaign trail aimed at making life more affordable and strengthening the economy that are at the top of voters' lists.

Almost all measures that lack detail require congressional approval. That could be difficult to achieve in the partisan climate on Capitol Hill.

Here's what you need to know about Trump's announced measures to deal with the economy:

Some parts of the Tax Cuts and Jobs Act of 2017, one of Trump's signature achievements during his time in the White House, are scheduled to expire at the end of 2025.

While the law lowered taxes for most people, Democrats often criticize the TCJA for disproportionately benefiting the wealthy.

Trump wants to extend all individual income and estate tax cuts in the 2017 law. These include, but are not limited to, an increase in the standard deduction, lower marginal tax rates for most income brackets, and an increase in the estate tax exemption.

Trump has proposed eliminating the cap on state and local tax deductions, known as SALT. The TCJA capped the deduction at $10,000, but the controversial cap expires at the end of 2025.

In addition, Trump has called for reducing the corporate tax rate for certain companies to 15%. The TJCA permanently reduced the top corporate tax rate from 35% to 21%.

Trump would also restore companies' ability to immediately withdraw investments in equipment and research.

The president-elect has introduced a series of targeted tax breaks, including eliminating federal taxes on tips, Social Security benefits and overtime pay.

Trump became the first candidate to promise an end to taxes on tips at a rally in Las Vegas about two months earlier than Democratic presidential candidate Kamala Harris. Although his campaign has not released details of the proposal, Trump has indicated that he would eliminate both federal income taxes and payroll taxes that fund Social Security and Medicare.

The Tax Policy Center found that virtually all tipped workers would receive tax breaks if Trump also eliminated the payroll tax on tips. However, these employees would then receive lower social security contributions after their retirement.

To appeal to seniors, a committed group of voters, Trump has vowed that Social Security recipients will no longer have to pay taxes on the monthly benefits they receive. About half of benefit recipients — mostly those with higher incomes — pay federal income tax on their Social Security benefits.

In addition, Trump has proposed eliminating taxes on overtime pay, although his campaign did not provide details. However, if workers don't have to pay payroll taxes on their overtime pay, they could receive less from Social Security in retirement.

If enacted, all three measures could cut 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 participants if the revenue is not replaced. said the Committee for a Responsible Federal Budget.

Trump has also proposed eliminating the federal income tax and replacing it with revenue from tariffs.

The former president unveiled several measures during the campaign to help Americans cover their living expenses.

He has said he will temporarily cap credit card interest rates at about 10%, less than half the current rate.

And Trump promised to make interest paid on auto loans fully tax deductible, similar to the popular existing deduction for mortgage interest. While he argues this will encourage car ownership, some experts say it will mostly help wealthier Americans who itemize their deductions — and who typically buy more expensive cars.

To help older seniors and their family members, Trump has said he will push for a tax credit for family caregivers. Additionally, according to his platform, he would shift resources to home care and eliminate disincentives that lead to a shortage of caregivers.

Trump's vice presidential candidate, Senator from Ohio. JD Vance has proposed increasing the child tax credit to $5,000 per child, but the president-elect has not officially adopted that idea.

Increase tariffs and trade

Trump has said that if re-elected, he will impose a blanket tariff of either 10% or 20% on all imports entering the United States, as well as a tariff of more than 60% on all Chinese imports.

He has also imposed a 100% or 200% tariff on cars made in Mexico or on products from companies that move production from the United States to Mexico.

Trump claims that tariffs will boost American manufacturing, create jobs and bring in billions of dollars to finance other policy initiatives – such as tax cuts.

But it is unlikely that revenue from new tariffs would fully cover his spending proposals. The tariffs would also likely increase prices for American consumers. Trump has been falsely claiming for years that foreign countries are paying the tariffs. They are paid by importers based in the USA.

Separately, Trump has said he will renegotiate the USMCA trade deal his own administration reached with Mexico and Canada.

The former president has repeatedly criticized Harris over the rise in prices in recent years. He has promised to reverse course and lower prices for gasoline, food and other essential goods, but has not provided many details about how he would achieve that.

Trump has repeatedly said he would lower prices by boosting oil and gas production. He has vowed to allow more drilling and reduce regulations. However, these efforts may have limited impact on prices at the pump, which in the U.S. are heavily dependent on the global oil market.

Trump has also promised to withdraw unspent funds under the Inflation Reduction Act, a landmark climate law backed by the Biden-Harris administration, and 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 had agreed to lead the commission.

The president-elect has not put forward a formal housing proposal but has spoken on the campaign trail about how he would help homeowners.

Trump has promised to make housing more affordable and increase supply by eliminating cost-increasing regulations and freeing up some federal land for large-scale housing construction.

He also said falling interest rates will result in mortgage rates falling to 3% or even lower, making financing more cost-effective for homebuyers. (Presidents do not control interest rates, however.)

Trump has also blamed undocumented immigrants for driving up housing costs, which he would address through mass deportations and a ban on taking out mortgages.

The Republican Party platform also notes that it would “promote homeownership through tax incentives and support for first-time buyers.”

The former president said his plans to raise tariffs and cut corporate taxes would lead to a boom in American manufacturing.

He said he would impose tariffs on companies that move production from the United States to another country and specifically threatened John Deere with tariffs in September if the company canceled plans to move some production from the Midwest to Mexico , don't give up.

The idea is that tariffs make foreign-made goods more expensive compared to U.S.-made goods. But prices can also rise for US manufacturers if they have to import certain parts. And there will likely be retaliatory tariffs from other countries that make it harder for U.S. companies to sell goods abroad. In 2019, Federal Reserve economists found that Trump's previous tariffs led to a net decline in manufacturing employment.

In September, he called his proposal to cut the corporate tax rate to 15% for companies producing in the U.S. the “centerpiece” of his plan for a manufacturing renaissance.

While health care was a focus of Trump's first term – when he unsuccessfully tried to repeal the Affordable Care Act and issued several executive orders and proposals to lower drug prices – the president-elect is not placing the same emphasis on the campaign issue during this time.

He alternately said he would like to try again to repeal Obamacare and replace it with a better program. When pressed about this at a debate in September, Trump said he had “concepts of a plan.”

Vance tried to clarify some details at rallies last month. After initially indicating support for dividing healthy and sick Obamacare participants into different risk pools, which could jeopardize the law's protections for those with pre-existing conditions, he later walked back that view. In a debate in October he said He supports federal approval of state reinsurance programs, which have generally lowered Obamacare premiums by providing funds to insurers that take on large numbers of high-cost patients.