President Donald Trump said on Sunday that he plans to lower income taxes for people making less than $200,000 a year. He explained that the money the government collects from tariffs on imported goods could help replace income taxes for millions of Americans. Trump made these comments on his Truth Social platform, promising that many people might even see their income taxes completely eliminated.
Trump has long suggested that tariffs — which are taxes on goods coming into the U.S. — could help fund the government without needing as much income tax from workers. However, many experts have questioned if tariffs alone could bring in enough money to cover such a large amount.
Still, Trump insisted that his plan would benefit middle- and lower-income workers. As he traveled back from his golf club in New Jersey, he said, “We’re going to make a lot of money, and we’re going to cut taxes for the people of this country.” He admitted that it would take some time to fully put this plan in place.
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At the same time, a new CBS News poll showed that 69% of Americans feel that Trump’s team is not focusing enough on lowering prices. The poll also revealed that approval of Trump’s handling of the economy has fallen to 42%, down from 51% in early March.
New Trade Deals and Tougher Tariffs
Trump’s plan to use tariffs for funding comes with bigger moves in global trade. Earlier this month, his administration set new “reciprocal tariffs” — high taxes on goods from many countries. However, they paused these tariffs for 90 days for most nations, except China.
The government is now working on new trade deals with 17 major partners around the world. Talks with several Asian countries are going especially well, according to officials. They hope these deals will lead to better conditions for American businesses and workers.
Meanwhile, China faces the toughest tariffs. Trump recently raised tariffs on Chinese goods to a stunning 145%. The idea behind this move is to pressure China into making a deal. Officials believe China’s economy depends heavily on selling goods cheaply to the U.S., and these high tariffs could force them to come to the negotiating table.
While Trump said that discussions with China were ongoing, Chinese officials have denied that. One top official said that while talks about global economic stability took place recently, there were no detailed talks about trade yet. Still, he expressed hope that a deal could eventually be reached after an initial agreement and good behavior by trading partners.
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Big Tax Cut Plans on the Horizon
In addition to the tariff-driven tax cuts, Trump also wants to extend and expand other tax reductions. Many of the tax cuts he signed into law during his first presidency are set to expire at the end of 2025. Trump aims to make them permanent and add even more breaks for workers.
One idea he has proposed is to make all tip earnings tax-free, meaning workers in industries like restaurants and hotels wouldn’t have to pay taxes on the tips they earn. He also wants to cut the corporate tax rate even further — from 21% down to 15% — in hopes of boosting business growth.
In Congress, Republicans have been working on a plan that could allow up to $5.3 trillion in tax cuts over the next ten years. Trump’s trade team argues that the money collected from tariffs could cover this massive amount. However, many economists think tariffs will bring in much less money than Trump predicts.
Even though there is debate over the numbers, Trump’s team is moving ahead with their plans. They are betting that tariffs, new trade deals, and fresh tax cuts will all come together to help middle-class Americans and strengthen the U.S. economy.
