Trump Administration Proposes Eliminating Federal Income Tax for Earners Under $150K

President Donald Trump’s administration has unveiled a bold plan to eliminate federal income taxes for individuals earning less than $150,000 per year. The announcement came from Commerce Secretary Howard Lutnick, who confirmed that he is working to turn Trump’s vision into reality.

“I know what his (Trump's) goal is… no tax, for anybody who makes less than $150,000 a year. That's his goal. That's what I'm working for,” Lutnick said during an interview with CBS News.

The proposed plan would eliminate taxes on tips, overtime pay, and Social Security contributions, aiming to provide financial relief to middle-class Americans. Trump’s administration argues that the policy will stimulate economic growth and allow workers to keep more of their hard-earned income.

Critics, however, warn that such a drastic tax cut could increase the national deficit and lead to severe budget shortfalls. Lutnick dismissed these concerns, claiming that cracking down on overseas tax evasion would generate enough revenue to compensate for the loss of tax income.

The Republican-led House of Representatives has already approved Trump’s $4.5 trillion tax cut plan, which is part of a broader bill addressing immigration, trade, and defense spending. The bill is now headed to the Senate for approval.

While Trump’s supporters hail the move as historic tax reform, critics argue that it favors the wealthy and threatens public services. The White House maintains that eliminating taxes for middle-class Americans will boost consumer spending and create jobs, while reducing dependence on government assistance programs.

The fate of the plan now rests with the Senate, where intense debate is expected in the coming weeks.

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