Summarize this content to 2000 words in 6 paragraphs President Donald Trump’s tax plan could give some Americans an extra $24,000 per year.U.S. Commerce Secretary Howard Lutnick said Trump is looking to eliminate income tax for Americans earning less than $150,000, and at the higher end of that bracket, some would save up to the $24,000.Experts, however, are concerned with this massive endeavor and its potential long-term ramifications on the U.S. economy.Why It MattersDuring his campaign, Trump suggested that he could eliminate the federal income tax by implementing an all-tariff policy.This has garnered criticism from some who say adding tariffs instead of an income tax would hurt low- and middle-income Americans while rewarding only the top earners.
President Donald Trump addresses a joint session of Congress at the U.S. Capitol on March 4 in Washington, D.C.
President Donald Trump addresses a joint session of Congress at the U.S. Capitol on March 4 in Washington, D.C.
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What To KnowLutnick shared Trump’s plans in an interview this week. “How about no tax on tips? How about no tax on overtime? How about no Social Security? How about all those things—these are the kind of thoughts that will change America. I know what his (Donald Trump) goal is … no tax, for anybody who makes less than $150,000 a year. That’s his goal. That’s what I’m working for,” Lutnick told CBS.Single Americans making $150,000 fall under the 22 percent federal tax bracket, which equates to around $24,000 deducted from their paychecks for U.S. income taxes.What People Are SayingAlex Beene, financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “Eliminating income tax on those making less than $150,000 would obviously be a huge economic stimulus to a group of taxpayers who have been on the smaller end of recent tax cut efforts.This effort that would support lower and middle class homes additionally in a big way will undoubtedly find support, but the question is how much would it add to a ballooning deficit. The new administration is betting new tariffs and other international taxes could fill in the gap of this lost tax revenue, but history shows that assumption isn’t always a sound one. Basically, this is a wait-and-see story on all fronts.”Kevin Thompson, finance expert and founder of 9i Capital Group, told Newsweek: “Another one of Trump’s proposals aims to put more money into Americans’ pockets—but without much economic justification or logistical backing. The idea is to eliminate taxation for those making less than $150,000.Surprisingly, corporations would benefit the most. Eliminating income taxes for those under $150,000 removes the pressure for companies to provide livable wages. Instead of corporations stepping up with higher wages, the burden shifts back onto taxpayers.”What Happens NextThompson said Americans might feel financial relief in the short term from having more take-home pay under Trump’s tax cut, but there could be larger issues in the long run.”Long-term, this could lead to growing federal deficits as tax revenue declines, but government spending continues,” Thompson said. “Future generations would inherit increased debt burdens. Advocates might argue that growth and consumption could offset some losses, but we’re talking about trillions in lost revenue—a massive gap to fill. So yes, you might keep more of your paycheck now, but you’ll pay for it later through higher national debt and greater economic uncertainty.”
