Trump’s 2025 Tax Cut Plan: No Taxes on Tips, Overtime, or Social Security – Who Really Pays?
Trump's BIGGEST Tax Cut Promises: No Taxes on Tips, Overtime, Social Security, But Who Pays the Price?
President Trump is promising the biggest tax cuts in American history.
You’ve already heard about the no tax on tips, no tax on overtime, no tax on Social Security, but there’s more.
He’s added a full tax deduction on interest paid for American-made car purchases. And he’s even floated the idea of no income taxes for those earning under $200,000.
And if his plan doesn’t pass, he says your taxes could go up 68%.
Let’s rewind and hear the full context of that moment:
“One big, beautiful bill. We love that bill.
I won’t like it if it doesn’t pass. Neither will you.
If it doesn’t pass, your taxes are going to go up 68%.
These will be the biggest tax cuts in American history with 100% expensing—
which is something that people cannot believe they’re getting.
But it’s 100% expensing for companies investing in America
and increasing take-home pay for the typical family by thousands of dollars a year.
To show you how middle-income this is:
there’ll be no tax on tips, no tax on overtime,
no tax for the great seniors in Social Security.
We have a full deduction for interest.
If you buy a car that’s made in America, you get an interest rate deduction.
It’s got to be made in America.
If it’s not made in America, we really don’t care if you buy it or not.
But if it’s made in America, we want you to buy it.”
Interesting, right?
So today we’re breaking down what was said, what it means for you, and whether any of it has a real shot at becoming law.
Let’s dive in.
What Happened and When
On May 1st, 2025, President Trump gave a speech at the White House during the National Day of Prayer.
But this wasn’t just a faith-based message.
It quickly turned into a campaign-style pitch where Trump outlined his tax reform proposal, one that’s being developed right now by the House and Senate.
He called it a Big, Beautiful Bill and claimed it would deliver the largest tax cuts in history: eliminating taxes on tips, overtime, Social Security, and more.
But here’s the catch: This is a proposal, not a passed law. It’s still being negotiated, and with a slim Republican majority, the chances of it passing in full are uncertain.
Still, it raises some big questions worth digging into, starting with that headline-grabbing claim that your taxes could jump 68% if the bill doesn’t pass.
Where Did That 68% Come From?
Now, I’ll be honest with you, I’m not exactly sure where that 68% figure comes from. Maybe it’s referring to the expiring Tax Cuts and Jobs Act, which would raise taxes for a lot of folks if it’s not renewed.
And for the record, I hope it does get extended.
But to me, that number sounds more like a political warning than a financial forecast. As someone who helps real people tackle their taxes every day, I think it’s important to separate fact from fiction.
But hey, if you know where the 68% number came from, go to the YouTube video and drop a comment. I’d love to hear it.
Let’s Break Down Trump’s Tax Cut Promises
1. No Tax on Tips and Overtime
This would definitely help out service workers and hourly employees.
But implementing it? That’s not so simple.
The IRS would need to rework how employers track, report, and withhold taxes on this income.
And unless Congress also adjusts how Social Security and Medicare are funded, it could create a ripple effect.
That said, I think it’s great, and I hope this provision passes.
2. No Tax on Social Security Benefits
Now, a lot of seniors already don’t pay tax on Social Security, especially if their income is low to moderate.
But for those who do, this would be a huge win.
I mean, think about it.
You pay taxes your whole life, and this is money that’s already been taxed.
Come on... give people a break.
Eliminating taxes on Social Security is a good thing in my book.
3. 100% Expensing for Businesses
This one is a carry-over from the 2017 Tax Cuts and Jobs Act, which is expiring at the end of 2025.
It allows businesses to immediately deduct 100% of the cost of qualifying equipment, a provision known as bonus depreciation.
Instead of spreading the deduction out over several years, companies can write off the full cost in the first year the asset is placed in service.
Trump says he wants to bring this back, retroactive to January 20, 2025.
4. Interest Deduction for American-Made Cars
If you finance a US-made car and this passes, you could deduct the interest portion of your payments on your taxes.
I’m not sure if you’ll need to itemize your deductions or if it’ll still be available even if you take the standard deduction. We’ll see.
But it’s a clever incentive to support domestic car manufacturing, which I think is good.
So What’s the Catch?
Yes, these ideas could put more money in people’s pockets.
But they also raise big questions about how we’d pay for it all and whether Congress can agree on the details.
I’ve seen some math on this, and it doesn’t look like revenue from tariffs would be enough to cover these tax cuts.
But generally speaking?
I’m all for tax cuts. Bring them on.
One Last Thing
Trump didn’t mention this in his speech, but some sources say he’s also looking to raise the marginal tax rate from 37% to 39.6% for those earning over $2.5 million.
Go for it.
Tax the riches, they say.
And one more thing, Trump’s floated another bold idea:
He says he wants to eliminate income taxes for Americans making under $200,000 a year.
This came from a recent Truth Social post where he said revenue from tariffs would make it possible to substantially reduce or eliminate income taxes for working-class Americans.
We’ll see how that one plays out.
Final Thoughts
A lot of what Trump is promising sounds great on paper, especially if you’re a working-class American, a small business owner, or a retiree.
But whether these cuts happen, and how we pay for them, is still up in the air.
What do you think?
Would you support these changes?
Go to the YouTube video and leave a comment with your thoughts. I'd love to hear what you think.
