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The incoming president has grand ambitions to revamp the nation’s tax code, potentially putting more cash in citizens’ pockets, according to insiders and experts.
Throughout his campaign, Trump repeatedly vowed to slash taxes on gratuities and social security benefits, even floating the idea of completely eliminating income taxes, with hopes of making up the revenue through tariffs.
With the signature tax cuts from Trump’s first term scheduled to expire in 2025, and Republicans likely to control Congress, extending and expanding tax changes are high priorities.
A key wish-list item for an expanded tax cut program would be lowering corporate tax rates even further.
In 2027, Trump reduced the corporate tax rate from 35% to 21% — and now aims to bring it down to 15%.
“When you reduce the corporate rate by 2% wages go up 1%, corporations have more money to invest for workers,” Grover Norquist, an activist and president of Americans for Tax Reform, told The Post.
Norquist, a longtime GOP tax circles insider, said he expected full support from House and Senate leadership for the reduction.
Trump has also vowed to undo a component of his 2017 tax law: the $10,000 cap on state and local tax deductions, known as SALT.
The cap predominantly affects residents of high-tax blue states where soaring state and local taxes sustain bloated state bureaucracies, and Trump’s promise to repeal it has the potential for early bipartisan success.
“I take President Trump at his word and will hold him accountable for his promise to eliminate the SALT cap. I will work with him and anyone to get things done on behalf of the people,” said Long Island Democratic Rep. Tom Suozzi, an avowed enemy of the cap.
However, insiders say the repeal will face significant hurdles.
“The major problem is it pits high tax states against low tax states. Certain states like New York and California and New Jersey have really high state and local tax rates, and it gives people who live there an advantage in their deductions over people who live in [low-tax] places like Florida or Texas,” said Phil Magness, an economic historian at the Independent Institute.
President Trump will CUT TAXES for families and small businesses, and restore the SALT deduction, saving THOUSANDS of dollars for residents of New York, NJ, PA and others. #TrumpRallypic.twitter.com/SySTemOpxb
— AJ Huber (@Huberton) September 19, 2024
Far-left progressives may also oppose what essentially amounts to a tax cut for the wealthy. Socialist Squad Rep. Alexandria Ocasio-Cortez has criticized past efforts to remove the SALT cap as a “gift to billionaires.”
Norquist said he wasn’t certain Trump could fully lift the cap, but that raising the deduction could be a compromise solution.
