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Trump’s push to cut income taxes: what’s going on
In 2025, President Trump signed into law a sweeping tax-reform bill — One Big Beautiful Bill Act (OBBB) — that makes permanent many of the income tax cuts first introduced under his 2017 legislation.
Under the new law, individual income tax rates remain lower — avoiding the scheduled tax-rate increases that would have taken effect had the 2017 cuts expired.
In addition, the bill introduces new deductions that could further reduce taxes for some households — for example, allowing Americans to deduct auto-loan interest under certain conditions (for U.S.-assembled cars bought 2025–2028) and other targeted benefits.
But beyond making past cuts permanent, Trump has floated even more ambitious plans: in November 2025 he publicly suggested he might significantly reduce — or even completely eliminate — federal income tax, financed by revenue from tariffs on imports.
Who stands to benefit — and who may not
Beneficiaries
• High earners and wealthy households — According to analyses, the tax benefits under Trump’s plan are heavily skewed toward the richest Americans. For example, million-dollar-plus households receive a disproportionately large share of the tax savings.
• Middle-income earners (to some extent) — Middle-class households would see modest reductions: estimates show average tax savings around $1,000 for many by 2026 compared with what they’d pay if the 2017 cuts had expired.
• Certain workers — Under the new bill and proposed reforms, specific groups such as service-industry workers receiving tips, or those earning overtime, could benefit from exemptions (for example, “no tax on tips” has been put into law).
Who gains little or could even lose out
• Lower-income Americans — For many in the bottom income brackets, the benefit is minimal. Because many already pay little federal income tax, the cuts might not move the needle much for them.
• Those bearing costs of tariffs and economic consequences — Trump’s strategy to fund deeper cuts (or complete elimination) via tariffs is controversial. Many experts warn that tariffs — essentially taxes on imports — raise consumer prices and hit lower- and middle-income households disproportionately.
• Public budgets, social programs, and overall economic equity — By cutting revenue so drastically, critics warn that long-term government funding for things like social safety nets, infrastructure, or public services could be at risk.
Bigger picture: What’s at stake
• Economic incentive vs. inequality. Supporters argue that lower income taxes spur growth, incentivise work and investment, and give Americans more take-home pay. Indeed, lowering income tax can increase disposable income and potentially fuel consumer spending and business investment.
• Funding trade-offs. The plan to offset lost income-tax revenue with tariff income is risky. Tariffs tend to increase costs for consumers, and foreign retaliation is a possibility, which could hurt U.S. trade and economic growth.
• Long-term fairness and fiscal health. While the wealthiest may enjoy substantial tax savings, the distribution of benefits raises concerns about fairness. With less revenue collected, pressure may build to cut social spending — which would disproportionately affect lower- and middle-income households.
• Political and social consequences. Such large-scale tax cuts and the abolition of progressive income tax could deepen income and wealth inequality. It may also fuel debates about the social contract, welfare, and what kind of government the United States should have.
What’s next — What to watch
• Will the administration move forward to eliminate income tax entirely, as hinted? As of now, it remains a proposal. Some officials and economists doubt that tariff revenue will be sufficient to replace the lost tax revenue.
• How will the burden shift? If tariffs fund tax cuts, many households could see both higher consumer prices (through tariffs) and smaller or more uncertain gains in take-home pay — especially lower- and middle-income families.
• What will happen to social programs, public debt and deficits? With huge revenue loss, difficult trade-offs loom: either deeper cuts to public services or increased national debt — both of which have long-term consequences.
• Whether the tax-cut policy will survive political opposition. Tax reform has always been politically divisive; making tax cuts permanent or eliminating income tax altogether will face serious debate in Congress and among voters.
Conclusion
Trump’s push to cut income tax — codifying prior tax cuts and proposing even deeper reductions — represents one of the most ambitious fiscal efforts in recent U.S. history. For some Americans, especially very high earners, the benefits could be substantial. For many others, however, gains will be modest — and may come at the cost of increased inequality, higher prices, and uncertainty for social spending.
Attached is a News article regarding trump cutting income taxes in the us
https://caliber.az/en/post/trump-says-us-could-almost-completely-eliminate-income-tax
Article written and configured by Christopher Stanley
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