Trump's proposals for the economy - The new President's measures to boost manufacturing growth in the US
President-elect Donald Trump has proposed during the campaign a series of economic and tax measures to help citizens and stimulate the growth of production in the USA. His proposals include lowering taxes on individuals and corporations, raising tariffs on trade, and lowering the cost of living through the development of domestic manufacturing.
Expiring Tax Cuts
Parts of the Tax Cuts and Jobs Act of 2017, one of Trump's signature accomplishments during his time in the White House, are scheduled to expire at the end of 2025. He and Harris have differing views on how to address the expirations, which include cuts in individual income taxes and wealth taxes.
Trump wants to extend all the individual income and wealth tax cuts that the 2017 law provided. This includes, among other things, an increase in the standard deduction, lower marginal income tax rates for most income groups and an increase in the estate tax exemption.
He has suggested he would remove the cap on state and local tax deductions. The act capped the deduction at $10,000, but the controversial limit expires at the end of 2025. Additionally, Trump has called for lowering the corporate tax rate to 15% for certain companies. The act ultimately reduced the top corporate tax rate from 35% to 21%.
Elimination of taxes
The Republican leader has created a series of targeted tax breaks, including eliminating federal taxes on tips, Social Security benefits and overtime pay.
Seeking to appeal to senior citizens, Trump has pledged that Social Security recipients will no longer have to pay taxes on their monthly benefits.
If passed, these measures could reduce 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 if income is not replaced.
Trump has also sought to end the federal income tax and replace it with tariff revenue.
Help for the middle class
The Republican leader also unveiled several measures aimed at helping Americans afford the cost of living. He has said he will temporarily cap credit card interest rates at around 10%, which is less than half the current rate.
Trump promised to make interest paid on car loans fully tax-deductible, something similar to the existing deduction for mortgage interest. While he argues that it will stimulate car ownership, some experts say it will mainly help wealthier Americans who determine their deductibles and who typically buy more expensive cars.
To help seniors and their family members, Trump has said he would promote tax credits for caregivers of these people.
Increase in tariffs and trade
The president-elect has said during the campaign that he would impose a blanket tariff of 10% or 20% on all imports coming into the US, as well as a tariff of up to 60% on all Chinese imports.
It also targets a 100% or 200% tariff on cars made in Mexico or on products from companies that move production from the US to Mexico.
Trump claims the tariffs will boost American manufacturing, create jobs and bring in billions of dollars to help pay for other policy initiatives. But these changes risk raising prices for American consumers.
Price reduction
The Republican leader has promised to lower gas and grocery prices, though he hasn't given many details on how he would do that.
Trump has repeatedly said that this will be achieved by increasing oil and gas production. He has pledged to allow more drilling and reduce regulations. But these efforts may have a limited effect on prices, which in the US are highly dependent on the global oil market.
Investing in American businesses
The president-elect has said his plans to raise tariffs and cut the corporate tax rate will result in a boost to American manufacturing.
He has said he would impose tariffs on companies that move production from the US to another country, but that could also lead to retaliatory tariffs from other countries, making it more difficult for US companies to sell goods abroad.
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