You might finally be able to kiss some of your tax headaches goodbye, as Donald Trump’s latest tax plan could potentially free up to 93.2M Americans from paying income taxes. The proposal aims to scrap taxes on tips, Social Security benefits, and overtime pay — and could even include exemptions for essential workers like firefighters, police officers, and military personnel.

• Trump plans to replace these income taxes with tariffs to fund the government, potentially benefiting 38% of the 244M Americans eligible to vote in 2024.
• However, these tax exemptions could reduce federal revenue by $2T over the next decade, and with the inclusion of tariffs, the overall plan might lower revenue by $3T between 2025 and 2034.

Tariffs bite back: While Trump’s tax cuts may sound appealing to many, his proposed import tariffs could be a bitter pill for consumers to swallow. Imported goods could face a 20% tax, with Chinese goods seeing rates as high as 60%. Experts warn that these tariffs could offset over two-thirds of the long-run economic benefits of the tax cuts. They also caution that relying on tariffs might not make up for the lost tax revenue, shifting the burden to consumers through higher prices, which could disproportionately impact low-income families. Evercore analysts bluntly stated, “Spoiler alert: We don’t think tariffs will replace income taxes.”