President Trump’s latest tax proposal, introduced by Press Secretary Karoline Leavitt, is pitched as a middle-class relief package combined with reforms aimed at the wealthy. It would eliminate federal taxes on tips, Social Security benefits, and overtime pay, while closing the carried interest loophole that benefits hedge fund managers. The plan also seeks to extend the 2017 Tax Cuts and Jobs Act’s lower individual rates and reduce the corporate tax rate to 15%.
Supporters say these measures will increase take-home pay for workers, encourage business investment, and stimulate economic growth. By targeting a well-known investment tax loophole, the proposal also aims to demonstrate fairness in how tax burdens are shared. The corporate tax cut is positioned as a move to boost U.S. competitiveness and job creation.
Critics, particularly Democrats, argue the plan could widen the deficit and deliver disproportionate benefits to corporations despite its middle-class provisions. They also warn that without clear offsets, the revenue loss could threaten long-term fiscal stability. Some Republicans share concerns over how the cuts will be paid for, creating division within the party.