President Donald Trump announced that revenue generated by new tariffs will be used to significantly reduce, or even eliminate, income taxes for Americans earning under $200,000, reinforcing his broader tax cut agenda.
By yourNEWS Media Newsroom
President Donald Trump said Sunday that the tariffs his administration has placed on U.S. trading partners will directly fund sweeping tax cuts for middle-class Americans, particularly those making under $200,000 per year.
“When Tariffs cut in, many people’s Income Taxes will be substantially reduced, maybe even completely eliminated,” Trump wrote in a Truth Social post. “Focus will be on people making less than $200,000 a year. Also, massive numbers of jobs are already being created, with new plants and factories currently being built or planned.”
Calling the initiative a “bonanza for America,” Trump framed the tariff revenues as a critical component of his plan to extend and expand the 2017 tax cuts, which are scheduled to expire later this year. In addition to extending those cuts, Trump has pledged to eliminate taxes on tips and Social Security benefits.
In a recent interview with Time Magazine, Trump expressed openness to raising taxes on millionaires to help finance an extension of the tax cuts for the broader population.
“I certainly don’t mind having a tax increase,” Trump told Time. “I would be honored to pay more, but I don’t want to be in a position where we lose an election because I was generous, but me, as a rich person, would not mind paying and you know, we’re talking about very little.”
Trump emphasized that the priority would be protecting the middle class while limiting political vulnerabilities. “But I don’t want it to be used against me politically, because I’ve seen people lose elections for less, especially with the fake news,” he said.
Former White House strategist Steve Bannon endorsed the concept during an April 25 appearance on News Nation’s “CUOMO,” arguing that middle-class tax relief would require corresponding tax increases on wealthier Americans.
“This is being fought behind closed doors right now, and I’m telling you, with the massive tax cut, in addition, he’s going to give the working class and the middle class, the math only works out if you actually increase taxes on the wealthy,” Bannon said.
However, Trump has shown caution. A day after his Time interview, he told reporters at the White House that raising taxes on the wealthy could prove “very disruptive” and might result in an overall loss of revenue for the country.
House Speaker Mike Johnson also pushed back on the idea of raising taxes, telling Fox News on April 23, “I’m not in favor of raising the tax rates because our party is the party that stands against that.”
While acknowledging that multiple options were discussed during the funding package negotiations, Johnson advised patience, saying, “There were lots of ideas thrown out on the table along this process over the last year, but I would just say for everybody, just wait and see.”
As the Trump administration pushes ahead with both tariff collections and tax cut strategies, the final form of the plan to deliver relief to middle- and working-class Americans is expected to take shape over the coming months.