Donald Trump is the master of delivering catchy, extreme sound bites that stick in voters’ minds.
“We gave you the biggest tax cuts in history,” he shouted on his campaign trail this summer, “and we’ll do it again – but even bigger this time.”
Trump’s 2024 election promises feel like familiar territory: tax cuts, deregulation and pro-business policies, with seemingly little concern for America’s ballooning deficit.
He wants to “take on China like never before, putting American workers first”, boost domestic industry and oil production, and discard environmental regulations that might get in the way.
However, following through on these promises might not be so easy. If Trump were to secure a second term, it’s unlikely he would have the same Senate and house-majority support that pushed through his economic plans last time.
With his 2017 tax cuts set to expire in 2025, Trump wants to finish what he started, placing tax cuts and controversial trade tariffs high up on his economic agenda. So, how could another four years under Trump affect your finances?
What are Donald Trump’s key tax cuts?
The Tax Cuts and Jobs Act (TCJA) of 2017 was one of Trump’s most significant legislative achievements, and extending it is at the heart of his 2024 economic campaign.
The TCJA lowered the corporate tax rate from 35pc to 21pc, and reduced personal tax rates across income brackets. Rather than allowing them to expire in 2025, Trump is now pushing to make these cuts permanent.
For low-income families, the impact would be modest, with households receiving an average tax break of $490 in 2026. Middle-income families would fare slightly better, seeing about $1,430 in savings, and high-income families (the top 20pc) would receive roughly $11,420 in extra savings, according to the Tax Policy Center.
The child tax credit would remain at $2,000 per child, which offers some additional help for families, but falls short of some of the more extensive proposals offered by the Harris campaign.
For high-income households and corporations, extending the TCJA would likely deliver the most significant relief. The corporate tax rate would stay at 21pc, instead of reverting to the pre-Trump rate of 35pc, while high earners would continue benefiting from the 37pc top tax bracket, avoiding a return to 39.6pc.
One part of Trump’s TCJA legislation he has suggested scrapping is the controversial $10,000 cap on State And Local Tax deductions (Salt). Residents in high-tax states like New York, New Jersey, Connecticut and California have been significantly hit by the Salt cap since 2017.
In the past they could use a much larger portion of Salt deductions to reduce their federal tax bill. Seen as one of the more progressive elements of the TCJA, economists point out that rolling back the Salt cap would disproportionately benefit wealthy Americans and cost the government a projected $600bn over the next 10 years.
Capital gains tax cuts
One of the other major proposals Trump has floated is further reducing capital gains tax. This would be a big win for Wall Street investors, venture capital and real estate portfolios.
Currently, long-term capital gains are taxed at a maximum of 20pc. Trump has suggested reducing this rate to 15pc. The move would disproportionately benefit wealthier investors, who derive a substantial portion of their income from capital gains on assets like stocks and real estate.
Critics have voiced concerns that this policy would further widen the country’s wealth gap, offering little to no benefit for middle-class Americans who rely on wages and don’t own significant assets.
Tax on tips and overtime
Like Kamala Harris, Trump has proposed making tips tax-free for service workers. It’s a popular policy in key swing states, where the service industry is a major part of the local economy.
If passed, this initiative could allow millions of Americans to keep a larger portion of their earnings, a welcome boost for hospitality and restaurant workers.
In a September campaign rally, Trump called for taxes on overtime pay to be eliminated too. However, the policy could face challenges with enforcement. Some economists worry that reclassifying income as tips could become a loophole for higher earners to dodge taxes.
Higher healthcare premiums
Trump’s take on healthcare is a notable contrast to Harris. While the Democrats want to expand the Affordable Care Act (ACA) and reduce healthcare costs for families, Trump has vowed to repeal or replace the ACA with private insurance solutions.
If re-elected, Trump is likely to double down on efforts to dismantle key aspects of the ACA, making clear a broader goal to reduce government involvement in healthcare.
For Americans with pre-existing conditions who rely on ACA protections, this shift could mean much higher healthcare premiums and reduced access to care.
