White House Press Secretary Karoline Leavitt has announced President Donald Trump’s new tax proposal, aiming to give major relief to middle-class Americans while closing loopholes for the wealthy. The plan would remove taxes on tips, Social Security benefits, and overtime pay, putting more money into workers’ pockets.
Supporters say the changes would help service industry workers, retirees, and employees working extra hours, while critics warn the overall plan could still benefit corporations and the rich more than ordinary citizens.
Key provisions include eliminating taxes on tips, which would help restaurant staff, bartenders, and other tipped workers. Social Security benefits would also become fully tax-free, and overtime pay would no longer be taxed, encouraging more people to work extra hours.
Another major change targets the carried interest loophole, which allows hedge fund and private equity managers to pay lower taxes than average workers. Trump promises a stronger push to close it this time.
The plan would also extend the 2017 Tax Cuts and Jobs Act beyond 2025 and cut the corporate tax rate further from 21% to 15%, which Trump argues will create jobs and boost investment. Critics counter that it could deepen wealth inequality.
Potential benefits include higher take-home pay, more business growth, and a fairer tax system. Drawbacks include higher national debt, the possibility of corporate tax cuts favoring the wealthy, and no clear replacement for lost revenue.
The proposal faces an uphill battle in Congress, with Democrats strongly opposing it and some Republicans calling for spending cuts to offset the tax breaks.
