(NewsNation) — President-elect Donald Trump pledged to implement several initiatives if he defeated Kamala Harris in the 2024 election, including a plan to eliminate personal income taxes in exchange for at least a 10% tariff on all important imported goods and a 60% tariff on products imported from China.
The Congressional Budget Office estimates Trump’s plan to expand his Tax Cuts and Jobs Act of 2017 would, in 2024 dollars, cost $3.2 trillion over 10 years and $10.3 trillion over the next 30 years.
With Trump projected to win a second term in the White House, however, what does his proposed tax plan mean for the earnings of everyday Americans? The Penn Wharton Budget Model, a nonpartisan research project at the University of Pennsylvania, shows that the Trump tax proposal affects American workers in various income brackets following an election in which many voters considered the economy their top concern.
The Wharton project estimates that the Trump tax plan would increase the nation's primary deficits by $5.8 trillion over 10 years on a conventional basis and by $4.1 trillion on a dynamic basis, the report finds.
Here’s how the Trump plan benefits — or doesn't benefit — the income of Americans, according to Wharton research.
Income bracket: $48,000
Income category: Lower class
Income gain under Trump: 1.8% or $870
Wharton analysis: The projected increase was much lower than Harris’ proposed plan (1.8% vs. 4.8% or $2,260), and under Trump’s tariff proposal for products coming from China and other places, those tariffs turn middle-and-low-income earners into “net losers” because of the increased cost of goods, especially from China, the Wharton project reported.
Income bracket: $81,000
Income category: Middle class
Income gain under Trump: 2.1% or $1,740
Wharton analysis: While the Harris plan called for the Child Tax Credit to increase to $6,000 for newborns and $3,600 for children under 5 beginning in 2026, the Trump plan keeps the tax credit at $2,000. However, since the tax credit is scheduled to shrink, Wharton researchers consider his proposal a financial gain for Americans in this income grouping.
Part of Trump’s plan, however, calls for the stoppage of taxes on Social Security benefits. The Tax Foundation projected retirees who earn between $55,000 and $137,000 to be the biggest winners, the Wharton research project found.
Income bracket: $138,000
Income category: Upper Middle Class
Income gain under Trump: 2.8% or $3,970
Wharton analysis: This group represents the first to see a bigger financial gain than under the Harris proposal. With Trump planning to extend provisions of his 2017 signature plan, Wharton researchers found that the upper middle class would see significant benefits under Trump.
By extending the cuts beyond 2025, earners in this income bracket would see lower tax rates and a doubling of the standard deduction, the Wharton report said. Under the Trump plan, the standard deduction would jump to $24,000 from $13,000 for couples and to $12,000 from $6,500 for single residents.
Income bracket: $327,000
Income category: Top professional earners
Income gain under Trump: 2.7% or $9,020
Wharton analysis: Researchers found that like the upper middle class, this income bracket would also see significant benefits from the extension of the 2017 Trump plan. The Trump initiative raised the threshold of the Alternative Minimum Tax. Before 2017, Wharton researchers, citing the Tax Policy Center, found that about 18% of workers earning between $200,000 and $500,000 paid the AMT. After the Trump plan went into effect, less than 1% were affected by the AMT.
Income bracket: $1.8 million
Income category: Top 1%
Income gain under Trump: 2.6% or $47,220
Wharton analysis: By extending the 2017 plan, earners in this wage bracket saw the top income tax rate drop from 39.6% to 37%, which resulted in a tax cut of nearly $50,000, the Wharton project found. In addition, business owners who earn $1.8 million benefit from a 20% deduction for qualified business income, the Wharton group reported.