Washington, D.C. — Former President Donald Trump’s latest tax proposal, which would extend portions of the Tax Cuts and Jobs Act (TCJA) paired with his plan to repeal the Affordable Care Act (ACA), would give massive tax cuts to the wealthiest households. The approach is particularly eyebrow raising, as a new Center for American Progress Action Fund analysis finds that the former president is promising to effectively increase taxes on the typical household by $1,500 per year through a plan to impose a 10 percent tariff on all foreign imports.
Specifically, Trump’s tax plan would:
- Deliver an average $175,000 tax cut to the top 0.1 percent of Americans—those with annual income greater than $4.5 million—by extending expiring portions of the TCJA.
- Eliminate key ACA taxes for high-income Americans, delivering an average $225,000 tax cut to the top 0.1 percent.
- Combined with the TCJA, Trump’s tax proposals would mean a total average tax cut of $400,000 for the top 0.1 percent of Americans.
- Give an annual average $3.5 million tax cut each to the top 0.001 percent, the approximately 1,500 highest income households, who will make more than roughly $80 million in 2026, by repealing the ACA taxes.
While Trump’s plans will force low- and middle-income families to pay the price for giving tax cuts to the wealthiest families, President Joe Biden’s proposed 2025 budget would put money back in middle-class families’ pockets. President Biden’s proposal would extend expiring tax cuts for low- and middle-income families, including enhanced financial help for ACA health plans and enacting additional financial relief through expanding the child tax credit. This would be done by raising taxes on the wealthy and large corporations.
President Biden’s proposals build on his administration’s actions to help cut costs for low- and middle-income families and on his administration’s successful work to reduce families’ costs by curbing junk fees and passing the Inflation Reduction Act, which places a $35 cap on insulin, a $2,000 limit on out-of-pocket prescription drug pricing, and empowers Medicare to negotiate for lower prescription drug prices.
“The former president’s tax proposals will give the wealthiest households a lofty tax cut, and middle-class Americans will be saddled with paying the price through higher living costs,” said Brendan Duke, senior director of Economic Policy at the Center for American Progress Action Fund and author of the article. “Meanwhile, President Biden has a proven track record of putting money back in low- and middle-income families’ pockets by going after junk fees and passing the Inflation Reduction Act. He has committed to making the wealthiest Americans and big corporations pay their fair share, not raise the costs of living for families.”
Read the article: “The Middle Class Will Pay the Price for Trump’s Tax Cuts for the Wealthy, Including Repealing the Affordable Care Act” by Brendan Duke
For more information or to speak with an expert, please contact Colin Seeberger at [email protected].