The 2024 campaign for president might not be the most issues-based race you’ve ever seen, but the past few weeks brought a flurry of talk about a variety of tax and tariff ideas that deserve some scrutiny.
Stirring the pot first was former President Donald Trump, who threw out two plans — dropping all taxes on tips and dramatically increasing tariffs to reduce federal income tax rates.
“Trump is right, no one should be taxed on the tips they receive,” said U.S. Rep. Marjorie Taylor Greene, R-Rome, who swiftly co-sponsored a bill to make tips tax-free.
In theory, not taxing tips sounds like a great idea for people who work in a restaurant or get a significant amount of their income via tips.
But it could also spur unintended consequences. If tips aren’t taxed, one might expect people to start claiming that their income isn’t a salary but mostly tips.
Meanwhile, Trump’s plan to dramatically raise tariffs caused a bit of heartburn for some GOP lawmakers.
“I’m not a big fan of tariffs,” said U.S. Rep. Austin Scott, R-Tifton.
Scott’s concern isn’t about using tariffs to protect U.S. industries, but the risk that other nations will retaliate with stiff duties against U.S. farm exports.
“Tariffs concern me as someone who prefers free trade,” Scott added.
While trading deep tax cuts for higher tariffs might sound intriguing, it’s hard to imagine Republicans in Congress proposing several trillion dollars in new tariffs on imported consumer goods — all of that levied on American companies — to replace individual income taxes.
“The math doesn’t work,” the Tax Foundation said.
The discussion about possible tax and tariff changes comes as both parties are looking ahead to 2025 — when the individual tax changes made by the Trump tax cuts will expire.
If nothing is done, 2026 will bring a tax increase. That’s already prompting talk of what lawmakers might change.
“Congress has an unprecedented opportunity to cut tax rates to their lowest level in almost a century,” the CATO Institute said this week.
Democrats see things a bit differently, still angered by the Trump tax plan.
“It was basically a big set of breaks for billionaires and multinational corporations,” said U.S. Sen. Ron Wyden, D-Ore.
“This election will decide whether the rich and powerful pay a fair share,” said U.S. Sen. Elizabeth Warren, D-Mass.
In between the verbal jabs expected during their first debate, maybe President Joe Biden and Trump can talk tax policy.
It will be a big issue next year — no matter who wins in November.
Jamie Dupree has covered national politics and Congress from Washington since the Reagan administration. His column appears weekly in The Atlanta Journal-Constitution. For more, check out his Capitol Hill newsletter at http://jamiedupree.substack.com.
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