The Notes

Key points include:​

• Elimination of Income Taxes on Tips, Overtime, and Social Security Benefits: The administration proposes removing federal income taxes on tips, overtime pay, and Social Security benefits, aiming to increase disposable income for workers and retirees. ​
• Introduction of Universal Tariffs: A universal baseline tariff on all imports is proposed, intended to protect American jobs and reduce the trade deficit. However, economists caution that this could lead to higher consumer prices and potential trade conflicts. ​
• Deductibility of Auto Loan Interest: The plan includes allowing taxpayers to deduct interest on auto loans for American-made vehicles, aiming to boost domestic automobile manufacturing.
• Reduction in Corporate Tax Rate: The proposal suggests lowering the corporate tax rate from 21% to 18%, with the goal of stimulating business investment and economic growth. ​
• Potential Impact on Federal Deficit: Analysts estimate that these tax cuts could add approximately $4.5 trillion to the federal deficit over the next decade, raising concerns about fiscal sustainability.