Throughout his 2024 presidential campaign, former president Donald Trump has spontaneously proposed roughly a dozen tax cuts that sound perfectly targeted toward constituencies he likely wants to win over. For hourly workers: no taxes on overtime pay. For Nevada service workers: no taxes on tips. For the Michigan auto industry: tax deductions for car loan interest. For people in the Southeast who were recently hit by hurricanes: tax deductions for home electricity generators. For seniors: no taxes on Social Security benefits. For military members, firefighters, police, and veterans: no taxes whatsoever. Some of these proposals are so arbitrary that one might think they were pulled from a randomized policy generator.
Each proposal is so vague or riddled with obvious flaws that it suggests very little thought was given to how any of them would work. For example, since Trump announced his no tax on overtime or tips proposals, he has failed to answer some basic questions about how they could be implemented. Would these sources of income just be exempt from federal income tax, or would they also be exempt from payroll taxes that are currently earmarked for Social Security and Medicare? If the answer is yes, would workers then receive lower benefits in retirement because they paid less into the programs? And what guardrails would be put in place to prevent high-income professionals from simply reclassifying their income as tips or overtime pay?
What about Trump’s proposal to eliminate income taxes on Social Security benefits? Like payroll taxes, the revenue collected from these taxes is legally earmarked to pay for Social Security and Medicare benefits. Both programs are currently spending more than they take in through dedicated revenue sources, and when their trust funds are exhausted — something that is already slated to happen within about a decade — benefits are automatically cut across the board. How could Trump’s promises not to cut Social Security or Medicare be squared with his tax proposals that would make these automatic cuts even bigger?
The only reasonable conclusion is that these are not serious policy proposals, they are fools’ gold to entice undiscerning voters. The swing voters who will decide the election next week shouldn’t let Trump’s pandering promises distract them from the high costs that giving him a second presidency would likely impose.
