On Thursday, White House Press Secretary Karoline Leavitt, in the middle of an outdoor press gaggle, took a moment to lay out President Trump’s tax priorities, most of which he talked about during the campaign.
.@PressSec lays out the tax priorities of the Trump administration:
✅ No tax on tips
✅ No tax on seniors’ Social Security
✅ No tax on overtime pay
✅ Renewing the Trump Tax Cuts
✅ Adjusting the SALT cap
✅ Eliminating special tax breaks for billionaire sports team owners
✅… pic.twitter.com/L6gaZUPFev— Rapid Response 47 (@RapidResponse47) February 6, 2025
Leavitt said:
These are the tax priorities of the Trump administration that the president has laid out for the members in that meeting today. No tax on tips, which is very obviously a very public campaign promise the president made. No tax on senior’s Social Security. No tax on overtime pay. Renewing President Trump’s 2017 middle-class tax cuts – again, these are the president’s priorities – adjusting the SALT cap, eliminate all special tax breaks for billionaire sports team owners, close the carried interest tax deduction loophole, tax cuts for made in America products. This will be the largest tax cut in history for middle-class working Americans, and the president is committed to working with Congress to get this done.
She was referring to a lengthy meeting with Republican House leaders on Thursday, in which they discussed his priorities on the budget:
Some House GOP ldrs return to the Capitol after a 5 hour meeting with Trump about budget/reconciliation/tax cuts/spending cuts. Scalise: We narrowed the gap and we’re getting very close to getting this to budget committee
— Chad Pergram (@ChadPergram) February 6, 2025
See Related: Trump Reveals More About Tax Plans That Will Make a Lot of People Happy, to Cheers at Nevada Rally
Let’s take a closer look at some of these ideas.
1) No tax on tips. Not all that long ago tips were mostly cash, and probably were vastly under-reported. Nowadays, though, tips are generally added on to a credit or debit card transaction and thus are reported and reportable. This isn’t really a big policy/funding issue, but one thing that this would likely cause would be incentivizing great service in American restaurants, as tips would suddenly become more lucrative.
2) No tax on seniors’ Social Security. This seems only just, as the income that was partly confiscated to pay for Social Security was already taxed; but, admittedly, Social Security has much bigger problems than whether it is taxed or not.
3) No tax on overtime. Again, incentives; incentivize production and you’ll get more of it. People always work hardest in their own self-interest, and tax-free time-and-a-half is a great incentive.
4) Renewing the Trump tax cuts from 2017. Why not cut further? Quibble: These should be described as “tax rate cuts,” not “tax cuts,” as the latter implies tax revenues would drop; that’s not necessarily the case, as if the cuts land us on the right side of the Laffer Curve, revenues could increase.
5) The SALT cap. This is a cap on the amount of state and local taxes that may be deducted from federal taxes; it’s not clear in which direction the president intends to adjust this cap.
6) Eliminate special tax breaks for billionaire sports team owners. Yes. Duh.
7) Close the carried interest tax deduction loophole. Carried interest is taxed generally at a lower interest than other financial instruments, but again, there’s insufficient detail here to know exactly what’s being proposed.
8) Tax cuts for American-made products. This is a good idea if on-shoring our industrial and business base is the goal. Incentives matter.
Can we talk about ending the income tax, replacing it (if at all) with a retail-level consumption tax, and eliminating the IRS altogether?
See Related: Argentina Dumping Their Version of the IRS – Can We Do That, Please?
So why tax cuts? Because incentives matter. Not only is it our money, not the government’s, but having people keep more of their own money prompts them to do things with that money – like spend, invest, start new business ventures, dabble in creating new products – all things that drive economic activity and growth. Although the first point is enough of a reason to scale back the confiscation by force of part of each American’s income – and if you don’t believe the “by force” part, try not paying your taxes for a while, and see how long it takes the government to send men with guns out looking for you.
The trick now is to see what the president can get Congress to go along with – and that will not happen for some time yet.
Statement from NVCA President and CEO Bobby Franklin in response to President Trump reportedly calling for an end to carried interest during his meeting today with GOP tax leaders: pic.twitter.com/h6uXKJs52N
— NVCA (@nvca) February 6, 2025
