- The Trump administration is considering letting tax rates for top earners revert to pre-2018 levels (from 37 percent back to 39.6 percent) to fund Trump's proposal to eliminate taxes on tipped wages.
- Tax Cuts and Jobs Act of 2017, which lowered taxes for corporations and individuals, is set to expire in 2024. If not renewed, the top tax rate would rise, affecting about 1% of taxpayers.
- Trump has proposed exempting tips, overtime pay and Social Security benefits from federal taxes. A White House official suggested that raising taxes on the wealthy could offset the cost of this plan.
- Treasury Secretary-designate Scott Bessent argued that failing to renew the 2017 tax cuts would harm the middle and working class, lead to higher taxes and threaten the U.S. dollar's status as the global reserve currency.
- Supporters credit the law with economic growth and low unemployment, while critics (including Democrats) say it mainly benefited corporations and the wealthy, increasing national debt. Bessent insists its expiration would hurt average Americans the most.
The Trump administration is weighing a plan to let tax rates rise for the wealthiest Americans in order to finance its proposal to eliminate taxes on tipped wages.
Tax Cuts and Jobs Act of 2017, a signature legislative achievement of President Donald Trump's first term, reduced the top individual income tax rate from 39.6 percent to 37 percent for single filers earning over $609,351 and married couples earning more than $731,201.
If the law expires at the end of 2024, those rates would reset to their previous levels and the income threshold for the top bracket would also drop, affecting roughly one percent of taxpayers.
In line with this, Trump proposed during his 2024 presidential campaign that Americans who rely on tips, overtime pay or Social Security benefits could soon see their federal tax burdens lifted.
To do this, a senior White House official revealed that allowing income tax rates for top earners to revert to pre-2018 levels could be the most politically viable way to offset the cost of Trump's campaign pledge to exempt tipped income from taxation.
"If we renew tax cuts for the rich paid for by throwing people off Medicaid, we're gonna get f--king slaughtered," the White House official said.
Bessent: Failure to renew Tax Cuts and Jobs Act of 2017 would burden the middle and working class
Treasury Secretary-designate Scott Bessent echoed a similar stance about Tax Cuts and Jobs Act of 2017.
During his Senate confirmation hearing in January, Bessent warned that the U.S. would face an unprecedented "economic calamity" and a potential loss of the dollar's global reserve currency status if lawmakers fail to renew former Trump's 2017 tax cuts.
"Today, I believe that President Trump has a generational opportunity to unleash a new economic golden age that will create more jobs, wealth and prosperity for all Americans," the 62-year-old hedge fund manager told members of the Senate Finance Committee.
"We must make permanent the Tax Cuts and Jobs Act of 2017 and implement new pro-growth policies to reduce the tax burden on American manufacturers, service workers and seniors."
Tax Cuts and Jobs Act of 2017 lowered corporate tax rates from 35 percent to 21 percent and reduced individual income taxes across brackets. While supporters credit the law with fueling economic growth and record-low unemployment, critics, including former President Joe Biden and congressional Democrats, argue that it disproportionately benefited corporations and the wealthy while exacerbating the national debt.
However, Bessent pushed back, insisting that middle- and working-class Americans would suffer the most if the cuts expire.
"This is the single most important economic issue of the day," he told Senate Finance Committee Chairman Mike Crapo (R-Idaho) at that time. "If we do not renew and extend, then we will be facing an economic calamity and, as always with financial instability, that falls on the middle and working class people." (Related: Remember when all Democrats and Liberals exclaimed TRUMP only gives tax breaks to ultra-wealthy – How about NO TAXES for Middle Class?)
He added that the burden would take the form of higher taxes, while common deductions, like the child tax credit, would be slashed by half. Bessent also pledged to leverage Treasury tools to safeguard national security, tackle the "affordability crisis" and housing shortage and clamp down on wasteful spending.
"We must secure supply chains that are vulnerable to strategic competitors and we must carefully deploy sanctions as part of a whole-of-government approach to address our national security requirements. And we must ensure that the U.S. dollar remains the world's reserve currency."
Watch this video about Trump's proposed tax reforms and currency devaluation.
This video is from the Brighteon Highlights channel on Brighteon.com.
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