Trump's Tax Policy Changes and How They Will Impact You

Since Donald Trump returned to the White House in January 2025, several major tax changes have been proposed or implemented. Here’s what they mean for you and your wallet:

 

1. State and Local Tax (SALT) Deduction Cap

What’s Changing? Trump has proposed eliminating the $10,000 cap on state and local tax (SALT) deductions, which was put in place under the 2017 Tax Cuts and Jobs Act (TCJA).

Who Benefits? Wealthier Americans would see significant tax cuts.

What’s the Impact? This would increase the federal deficit, potentially leading to cuts in public services or future tax hikes. 

 

2. Price Hikes from New Tariffs

Section 4 Chapter 26 of Project 2025 discusses the use of tariffs in its economic reform proposals. 

 

What’s Changing? Trump has proposed tariffs of up to 60% on imported goods.

How It Affects You: Higher import taxes mean higher prices on everyday goods, including:

 

According to the Peterson Institute for International Economics, these tariffs could cost the average American household over $2,600 per year. Middle and lower-income families will feel this impact the most, as rising costs may outstrip any tax savings they receive.

 

3. Corporate Tax Cuts—Big Savings for Big Business

What’s Changing? Trump and Republicans are pushing to slash corporate tax rates from 21% to as low as 15%. Their plan also simplifies the tax code by eliminating many deductions and credits for businesses.

Who Benefits? Large corporations and billionaires, as they pay less in taxes.

What’s the Impact? The lost tax revenue—estimated to increase the federal deficit by $4 trillion—could result in major cuts to programs like:

  • Medicaid (healthcare for low-income families)
  • Nutrition Assistance (food aid programs like SNAP)
  • Education Programs (student aid and public school funding)

If these tax breaks pass, the total cost could exceed $5 trillion over ten years, shifting money away from middle and lower-income Americans to benefit corporations and the ultra-wealthy.

Project 2025 calls for the following tax policy changes:

1. A consumption tax on all goods: Project 2025 calls for a consumption tax on all purchases. (page 698)

2. Income tax hikes: For taxpayers in the 10% or 12% tax rate brackets now, Project 2025 would raise the federal income tax rate to 15%. For taxpayers in the 22% and 24% tax rate brackets, Project 2025 would raise the federal income tax rate to 30%. (page 696)

Economists estimate that a middle-class family with two children and an annual income of $100,000 would pay $2,600 in additional federal income tax if they faced a 15% flat tax on their income due to the loss of the 10% and 12% tax brackets. By comparison, a married couple with two children and earnings of $5 million a year would enjoy a $325,000 tax cut.

3. Home mortgage taxes and interest rates will go up too: Project 2025 calls for eliminating the State And Local Tax deduction (SALT) and privatizing the government’s mortgage lending vehicles, Fannie Mae and Freddie Mac, estimated to cost the average homeowner around $1200 per year as mortgage rates go up. (pages 697, 706)

Project 2025 will raise your taxes to pay for big corporate tax cuts. Project 2025 calls for the following tax policy changes:​

Want more details on these bad tax plans? LEARN MORE HERE and HERE