President Donald Trump wants to eliminate federal income taxes for Americans earning less than $150,000 a year, a move that could put thousands of extra dollars back into middle-class households.
Commerce Secretary Howard Lutnick confirmed the proposal in a CBS News interview, saying, "I know what his goal is: No tax for anybody who makes less than $150,000 a year. That's his goal. That's what I'm working for."
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Major Savings for Middle-Class Americans
Businessman and real estate investor Grant Cardone applauded the plan, tweeting, “No tax on $150,000! Saves twelve million households $38,000 a year in federal taxes. This puts more money in middle-class families to buy homes. Brilliant, executable, practical, and viable action by President Trump."
The proposal is part of a broader tax agenda that includes eliminating taxes on tips, overtime pay, and Social Security income. Trump has also floated the idea of scrapping the Internal Revenue Service entirely, replacing it with what he calls an “External Revenue Service” to collect money from foreign sources instead of American taxpayers.
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Questions Remain About Implementation
While the proposal could provide significant financial relief, experts say key details are still missing. Carl Johnson, a certified public accountant in New Orleans, expressed skepticism to Bankrate: "I'm not very hopeful about the way it is presented as a broad-based cut," warning that the plan might include provisions that exclude certain taxpayers.
Many lower- and middle-income workers pay more in payroll taxes (for Social Security and Medicare) than in federal income tax. Additionally, cutting taxes on Social Security benefits could increase the budget deficit by $1.6 trillion over ten years, according to the Tax Foundation.
A Republican-Controlled Congress Could Pave the Way
With Congress currently debating the extension of the 2017 Tax Cuts and Jobs Act, Trump's administration is pushing for even more aggressive tax cuts. Lutnick suggested that significant tax-law changes are expected, especially with a Republican-controlled Congress.
Trump's tax plans have already triggered strong reactions. Some economists warn that aggressive tax cuts could worsen the federal deficit, while supporters argue they will stimulate economic growth and bring jobs back to the U.S.
Trump's proposal to eliminate income taxes for those earning under $150,000 could indeed be a game-changer for millions of middle-class Americans. However, major questions remain about how it will be funded and whether payroll taxes would also be affected.
For now, the idea of no federal income taxes for millions of Americans has captured the attention of entrepreneurs like Cardone, who see it as a bold move with big potential benefits.
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