Trump Proposes Zero Federal Income Tax for Americans Earning Under $150,000
President Donald Trump's proposed tax policy aims to eliminate federal income taxes for individuals earning less than $150,000 annually, according to Commerce Secretary Howard Lutnick.
Trump speaking about paper straws
The plan would shift revenue collection from individual income taxes to external sources, primarily through a "membership fee" imposed on countries trading with the U.S. This proposal comes as Trump's 2017 tax cuts approach expiration.
Trump signing tax documents at desk
Key Points:
- Individuals earning under $150,000 would pay zero federal income tax
- Current $100,000 earners could save approximately $15,000 annually
- The plan aims to boost consumer spending and economic growth
- Revenue would be replaced through international trade fees
Potential Challenges:
- Federal income tax currently provides nearly half of government revenue
- Funding for essential services like Social Security and Medicare must be addressed
- International trade partners may retaliate with their own economic measures
- Congressional approval faces significant hurdles
The proposal represents one of the most significant potential changes to U.S. tax policy in history. While Trump's team promotes the benefits for middle-class Americans, critics question the plan's fiscal viability and potential economic consequences. More details are expected as the election approaches.
Note: A video statement from Commerce Secretary Howard Lutnick confirming these details was shared on social media on March 13, 2025.