Trump’s Proposed Tax Plan: Income Tax Exemptions and Economic Impact

Former President Donald Trump has unveiled sweeping tax reform ideas that could potentially exempt 93.2 million Americans from paying income taxes. His proposal includes targeted income tax exemptions for specific groups, like workers who earn tips, receive Social Security benefits, or collect overtime pay. Trump has also floated the idea of expanding these tax breaks to professions such as firefighters, police officers, military personnel, and veterans.

This article explores the details of Trump’s proposed tax cuts, the economic implications of his tariff plans, and the skepticism surrounding the feasibility of his overall strategy.

Key Tax Exemptions Under Trump’s Proposal

Trump’s tax reform proposal includes several key exemptions designed to offer relief to specific groups of taxpayers:

1. Tips and Overtime Pay: Under Trump’s plan, workers earning tips or overtime could see significant tax relief. In 2023, an estimated 4 million tipped workers, including waitstaff and service employees, could benefit.
2. Social Security Benefits: Trump aims to eliminate taxes on Social Security benefits, impacting over 68 million Americans who rely on these payments each month.
3. Public Service Workers: Trump also hinted at extending tax exemptions to police officers, firefighters, military personnel, and veterans. These groups total approximately 2.6 million individuals, including 18.6 million veterans as of 2023.

If implemented, these exemptions could reduce federal tax obligations for roughly 93.2 million people, a significant portion of the U.S. population. This represents about 38% of the 244 million Americans eligible to vote in 2024, and could play a major role in Trump’s pitch to voters.

Can Tariffs Replace Income Taxes?

In addition to tax cuts, Trump proposes funding the lost tax revenue by imposing a universal 20% tariff on all imports, with a 60% tariff on Chinese imports. His argument is that these tariffs would generate enough revenue to offset the loss from reduced income taxes.

However, tax experts are skeptical about this claim. Garrett Watson, a senior policy analyst at the Tax Foundation, states that “the math doesn’t work out.” According to the Tax Foundation, tariffs would raise about $3.8 trillion over the next decade, far less than the $33 trillion expected from income taxes in the same period. Evercore analysts echoed this concern, noting that tariffs will not replace the massive revenue loss from income tax cuts.

Additionally, tariffs function like a sales tax, increasing the cost of goods for consumers, particularly impacting low-income households, who already spend a higher percentage of their income on essentials. This “invisible tax” may offset any relief provided by income tax exemptions, especially for lower-income individuals.

Impact on Federal Revenue

The combined impact of Trump’s tax exemptions and tariff plan could significantly reduce federal revenue. The Tax Foundation estimates that these proposals, including exemptions on tips, Social Security benefits, and overtime pay, would decrease federal revenue by approximately $2 trillion over the next decade. Factoring in Trump’s other tax cuts and tariff proposals, the total revenue loss is projected to reach $3 trillion from 2025 to 2034.

These potential revenue shortfalls raise concerns about the sustainability of such a plan. Analysts argue that cutting such a significant portion of federal income while relying on tariffs to fill the gap could lead to increased national debt or reductions in public services.

Political Feasibility of Trump’s Tax Plan

While Trump’s proposed tax overhaul has captured the attention of voters, its implementation is far from guaranteed. His 2017 tax cuts, which provided significant reductions for businesses and high-income earners, are set to expire in 2025 unless extended by Congress. Trump has vowed to make those tax cuts permanent.

However, any substantial tax reform will require approval from the House of Representatives, where all tax bills originate. Currently, Republicans hold a slim majority in the House, but control of the chamber could shift after the 2024 election. If Trump wins the presidency but does not secure a Republican majority in the House, passing his tax overhaul would face significant challenges.

Trump’s proposed tax reforms, including targeted exemptions for millions of Americans, present an ambitious vision for overhauling the income tax system. While these ideas may appeal to certain voters, the economic feasibility of replacing income tax revenue with tariffs is widely questioned. With federal revenue potentially falling short by trillions of dollars, and political hurdles in Congress, the future of Trump’s tax plan remains uncertain.

As the 2024 election approaches, taxpayers and voters will need to weigh the benefits and risks of this tax strategy, considering both its potential relief and long-term economic consequences.

M&G has launched its first sustainable corporate bond strategy in collaboration with responsAbility, the Swiss-based asset manager.

The M&G (Lux) responsAbility Sustainable Solutions Bond Fund has been designed following active engagement with institutional and wholesale investors seeking sustainable active fixed-income strategies.

The fund, which is classified as Article 9 under the EU’s Sustainable Finance Disclosure Regulation, will leverage M&G’s deep credit expertise and responsAbility’s long-standing track record on impact and sustainable investing.

It will be co-managed by Mario Eisenegger and Ben Lord, who are long-standing members of M&G’s €161bn global fixed-income investment division.

ResponsAbility , a subsidiary of M&G acquired in 2022, will act as investment adviser, providing quality assurance and additional insights across sustainability themes and supporting the research teams.

ResponsAbility will also be a voting member of M&G’s independent Impact, SDG & Solutions Committee.

The team will follow a fundamental credit strategy, constructing a highly diversified portfolio of actively selected global investment grade bonds driving positive change in six distinctive areas: better health, better work & education, social inclusion, circular economy, environmental solutions and climate action.

Investments will be mapped to the UN Sustainable Development Goals (SDGs) according to their contributions and bonds in the portfolio. The bonds will either be:

• Project financing bonds – ESG bonds funding a specific project targeting either environmental (green bonds) or social outcomes (social bonds), or a combination of both (sustainability bonds).
• Solution Provider Businesses – Bonds issued by companies that actively address problems linked to environmental or social challenges through the core products and services they offer.

Ten years after the first corporate green bond was issued in 2013, the ESG bond market today presents investors with a growing universe of green, social and sustainability bonds.

In the first three quarters of 2024, global ESG corporate bond issuance reached $306bn, accounting for 23% of the current total corporate supply in the European Investment Grade space.  

Neal Brooks, global head of product and distribution at M&G, said: “This strategy is testament to M&G’s ability to combine its capabilities to create unique investment solutions that play to our strengths in active fixed income and responsAbility’s market-leading impact credentials.

“The M&G (Lux) responsAbility Sustainable Solutions Bond Fund has been tailored to meet demand from pension funds, insurance companies and wholesale investors in Europe looking to align active public fixed-income portfolios to positive change.”

Fund manager Mario Eisenegger added: “One of the most effective ways for bond investors to contribute to the Sustainable Development Goals is by directly funding environmental and social projects, and providing financing to businesses that make a meaningful, positive contribution to the planet or society through their underlying business models.

“This fund does exactly that, giving the team a clear mandate to be laser-focused on these urgent priorities when putting our clients’ money to work.”

NATIONWIDE has issued a warning after it was discovered that customers are not reporting scams under £100.

A study by the lender found a quarter of victims never reported their crimes, while a further 29% did not report scams under £100.

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Meanwhile, more than four in ten 25 to 34-year-olds were too embarrassed to report fraud of any amount, compared to a third of over 55s. 

Furthermore, one in three people aged 25 to 34 didn’t think they would get their money back, compared to more than half of those aged 35 to 44s. 

The discovery comes as the bank said it would waive the £100 excess as part of the new Payment Systems Regulator (PSR) fraud rules which came into effect in October.

Jim Winters, head of economic crime at Nationwide said: “As anyone affected by fraud or scams knows, it can have devastating effects.

“Protecting our customers is our top priority and that is why we are waiving the £100 excess because we want to encourage everyone to report incidents. It’s the right thing to do and we hope others will follow suit.” 

The PSR is the watchdog for payment systems in the UK.

Earlier this month, the body enacted new rules came which meant households, businesses and charities will be reimbursed financially if they are the victim of online banking fraud.

There is no minimum amount a person can claim for, but the maximum is £85,000.

However, banks can ask victims can apply a voluntary excess of £100 to victims.

This means that if your claim is for a payment of £100 or less, trying to recover the money may not be of any benefit.

This cannot be applied to vulnerable customers.

Nationwide joins Virgin Money, TSB and AIB in not charging the excess fee.

A Virgin spokesperson, previously told The Sun. said: “Where customer circumstances result in a reimbursement under the rules, we are not planning to apply the voluntary excess, and this includes claims under £100.”

While a TSB said that the bank is “prioritising fraud protection for customers”.

They said: “Charging £100 could exclude a third of all victims from claiming refunds – and it’s not right to penalise people for scams that take place largely due to weaknesses on social media platforms.”

Last year there were 232,429 cases of APP fraud in the UK – a 12% jump since the year before.

Meanwhile, HSBC, First Direct, Lloyds, Halifax and Bank of Scotland, all said they would choose to implement it.

How do I protect myself against scammers?

When shopping online, always be cautious about where you’re buying from and what you’re buying.

If a price looks too good to be true, sometimes it actually is.

It’s much safer to stick to reputable websites where you know people in the UK usually shop from.

If you’re not sure about a website, it’s worth googling customer reviews and asking friends for their experiences.

Fraud cases which begin through phone conversations or emails are typically less common, but can lead to scammers getting hold of larger amounts of your cash.

Always check the source of the phone call by googling the number, or making sure the email is from an official domain.

Scammers can pose as banks and other trusted sources to get the information from you which they need to enter your bank account.

Always be sceptical not to provide any personal details over the phone – do not give away your PIN or full password as your bank will not need this and you are likely being scammed.

If you’re unsure, end the call and ring the trusted number of the organisation so that you definitely know you’re talking to the right people.

Christmas can be a magical time for families, but finding the perfect gifts without going into debt is a concern for many parents. Thankfully, you don’t need to spend a fortune to give your children a fun and memorable Christmas. In this guide, we’ll cover affordable Christmas gift ideas that are under $100, helping you stick to your budget while delighting your kids with thoughtful, engaging presents. Here are toys under $100 that offer fun, educational, and imaginative play for kids of all ages.

LEGO Classic Creative Brick Box (Approx. $40)

One of the best budget-friendly Christmas presents for kids is the LEGO Classic Creative Brick Box. With over 500 pieces, this set allows kids to build just about anything they can imagine. Not only is it affordable, but it also encourages creativity and problem-solving.

Why It’s Great:

Endless building possibilities.

Develops fine motor skills and creativity.

Long-lasting entertainment, ideal for kids aged 4+.

Wooden Standing Art Easel (Approx. $65)

For children who love to create, the Wooden Standing Art Easel is a fantastic option. This easel has both a chalkboard and a dry-erase board, as well as a paper roll for drawing or painting. It’s a wonderful gift for encouraging artistic expression and makes for one of the top affordable Christmas gift ideas.

Why It’s Great:

Versatile and easy to use.

It helps kids develop their creativity.

An affordable option for parents seeking art-related gifts.

VTech KidiZoom Smartwatch DX2 (Approx. $45)

If your kids love tech, the VTech KidiZoom Smartwatch DX2 is the perfect combination of fun and functionality. This kid-friendly smartwatch offers educational games, a camera, and activity trackers. It’s one of the most popular toys under $100 that parents can give without breaking the bank.

Why It’s Great:

Combines fun and education.

Safe, affordable tech for kids aged 4-12.

Encourages learning and physical activity.

Crayola Light-Up Tracing Pad (Approx. $25)

Looking for affordable gift ideas for Christmas that inspire creativity? The Crayola Light-Up Tracing Pad is an excellent choice for kids who love drawing. This glowing tracing pad makes it easy for kids to create artwork in any light, helping to develop artistic skills.

Why It’s Great:

Portable and easy to use.

Encourages artistic development.

It is one of the most budget-friendly creative toys available.

Hot Wheels Track Builder Unlimited Corkscrew Twist Kit (Approx. $40)

For action-packed fun, the Hot Wheels Track Builder Unlimited Triple Loop Kit offers endless entertainment. This kit allows kids to design and build their own racetracks, making it one of the most engaging toys under $100 for active play.

Why It’s Great:

Customizable racetrack design.

Affordable gift with hours of entertainment.

Ideal for children aged 5+.

Educational Insights Artie 3000 Coding Robot (Approx. $70)

For STEM-loving kids, the Artie 3000 Coding Robot teaches the basics of programming through fun, interactive play. This robot is a great introduction to coding, making it an excellent educational gift option and one of the top affordable Christmas gift ideas for parents seeking to inspire their children’s interest in tech.

Why It’s Great:

Combines creativity with coding.

Affordable STEM toy for kids aged 7+.

Fun and educational.

Magnetic Building Blocks Set (Approx. $30)

Magnetic building blocks are an affordable way to give kids a fun, hands-on learning experience. These blocks help develop spatial awareness and problem-solving skills, making them one of the best budget-friendly Christmas presents for younger children.

Why It’s Great:

Promotes STEM learning through play.

Affordable and durable.

Ideal for children aged 3+.

Hatchimals CollEGGtibles 12-Pack Egg Carton (Approx. $20-$50)

For younger children who love surprise toys, the Hatchimals CollEGGtibles 12-Packoffers hours of fun. These cute little creatures come in an egg carton, and kids can “hatch” them to discover which Hatchimal they’ve received. This is a great affordable Christmas gift for children who enjoy collectibles.

Why It’s Great:

Fun unboxing experience.

Affordable and engaging for younger kids.

Great for kids who enjoy collecting toys.

Razor A Kick Scooter (Approx. $30-50)

The Razor A Kick Scooter is a classic toy that encourages outdoor play. It’s durable, lightweight, and foldable, making it an affordable and fun gift for kids who love staying active. A perfect budget-friendly Christmas present for any child.

Why It’s Great:

Encourages physical activity.

Durable and easy to transport.

Affordable outdoor toy for kids aged 5+.

Nerf N-Strike Elite Disruptor Blaster Twin Pack (Approx. $35)

Nerf toys are always a hit (forgive the pun), and the N-Strike Elite Disruptor Blaster is an affordable option for action-packed fun. At only around $35, it’s one of the best affordable Christmas gifts for parents on a budget who want to encourage imaginative play.

Why It’s Great:

It is affordable and great for group play.

Encourages active, imaginative fun.

Perfect for kids aged 8+.

Additional Tips to Save on Christmas Shopping

While these gifts are all affordable, there are even more ways to save:

Black Friday & Cyber Monday Deals: Take advantage of holiday sales to get even lower prices on these budget-friendly toys.

Use Cashback Apps: Apps like Honey or Rakuten can help you earn money back on purchases.

Secondhand Shopping: Consider high-quality secondhand toys from platforms like eBay or Facebook Marketplace to save even more.

Related:How to Have a Debt-Free Christmas: Last-Minute Strategies to Manage Your Holiday Spending

The Verdict

With careful planning and the right gift choices, you can provide a memorable and fun Christmas for your kids without financial stress. These affordable Christmas gift ideas—ranging from creative to tech-savvy to active play—will bring joy to your children without going over budget. Start your shopping early to take advantage of sales and ensure a debt-free holiday season.

DRINKERS may think their favourite craft beer is owned by an independent brewer, but this may not always be the case.

The style of beer has risen in popularity over recent years, with many believing it tastes better because it is produced in a smaller area and not churned out to the masses.

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Local brewers also churn out a range of unusual flavours, helping non-traditional beer drinkers expand their palette.

The UK craft beer market was worth £1.7billion in 2023, with a 4.5% increase from the previous year. 

By the end of this year, the market is expected to be worth £1.8billion.

Over the past few years, a number of the world’s biggest beer makers have been snapping up independent brands as they look to get a slice of the action.

Now, a recent YouGov study found 75% of consumers feel duped into believing their craft beer is from a local company when it is owned by a corporation.

Andy Slee, chief executive of the Society of Independent Brewers and Associates, (SIBA) said: “People want to support smaller independent businesses.

“There is more choice than ever when buying beer, but it can be really hard to know what’s the real deal.”

For concerned customers, SIBA has launched the Indie Beer Checker to make it simple for people to see whether the beer they’re buying is brewed by a genuine independent brewer.

It can be found at https://indiebeer.uk/.

You can also look for the Indie Beer logo when buying beer, which can only be used by genuine independents.

Beavertown

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This craft brewery was founded in 2011 by Logan Plant, the son of Led Zeppelin lead singer Robert Plant.

The London-based brewery became a fan favourite amongst trendy city folk, thanks to its zingy flavours.

But in 2018 Heineken carved out a minority stake in the business, before completely buying the brand in a multi-million-pound sweep.

Its most famous drinks include Neck Oil, a popular tipple with youngsters.

It can now be bought at supermarkets such as Tesco for £6.

Camden

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Camden Brewery was once the poster child for independent brewing, founded in 2006 by the owner of a pub in the London borough.

But just a decade on Budweiser owner AB InBev bought the brand for £85million.

That has not stalled its success, selling over seven million pints of its famous Camden Hells craft larger in 2021.

Fullers

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The pub giant has a range of craft ales which are loved by customers.

But the maker of Frontier and London Pride sold its beer business to Ashai for £250m five years ago.

At the time, the business said it wanted to exit the beer business to focus.

Brooklyn Stonewall Inn IPA 

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This American IPA is a fan favourite among boozers, and was first made in New York back in 2017.

It was named after the Stonewall Inn, a gay bar in the city which later became synonymous with the LGBT rights movement following a series of riots which took place there in the 1960s.

Its manufacturer Brooklyn Brewery was bought by Carlsberg in 2020 for around £100m.

The beer can be found today in certain pubs and supermarkets such as Waitrose.

Doom Bar

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The ale is loved by craft fans across the UK.

It was first brewed all the way back in 1995, by Sharps Brewery in Cornwall.

At the time, the Canadian brewing giant paid £20million for the business.

The ale, remains popular with punters making sales of nearly £92million in 2023.

Should You Buy or Lease an Electric Vehicle (EV)?

The decision to buy or lease an electric vehicle (EV) has become increasingly relevant as the automotive landscape continues to evolve. Ten years ago, leasing was often seen as an option for affluent individuals who preferred to upgrade their cars regularly. However, the rapid pace of technological advancements in the auto industry has changed this dynamic. Cars are no longer just modes of transportation—they are complex technological devices. As a result, many consumers now seek to upgrade their vehicles more frequently to stay in sync with the latest developments, which has made leasing a popular alternative to purchasing. 

This guide explores the benefits and drawbacks of both leasing and purchasing an EV, helping you make an informed decision that fits your financial situation and personal needs. 

The Appeal of Leasing an Electric Vehicle 

Leasing an EV has become more appealing for many reasons. When you lease, you essentially “rent” the car for a fixed term, making monthly payments over a period of two to four years. Once the lease is up, you return the vehicle to the dealer, with no long-term financial commitment. This is particularly advantageous in today’s rapidly evolving electric vehicle market, where advancements in battery technology, charging capabilities, and software are happening every year. 

For instance, a 2027 model is likely to offer significant improvements over a 2024 model—including increased range, faster charging, and enhanced features. Leasing allows consumers to upgrade to these newer models without the long-term commitment of owning a vehicle that could quickly become outdated. 

Benefits of Leasing 

1. Access to the Latest Technology: Leasing allows you to always drive a newer model with the most up-to-date technology. This is especially valuable in the EV space, where developments in battery life, charging infrastructure, and performance are constantly evolving. 

1. Lower Monthly Payments: Leasing typically requires less money upfront compared to purchasing, and monthly payments are often lower than loan payments. This makes leasing more accessible for people who want to drive a new car without making a large financial investment. 

1. Flexibility: After the lease term, you have the option to upgrade to a newer vehicle or even switch to a different brand. This flexibility is crucial as EV technology continues to advance rapidly. 

Example Leasing Deals 

To illustrate, leasing a Hyundai Ioniq 5 can be a highly affordable option. Currently, you can lease the Ioniq 5 SE Standard Range for $229 per month over a 33-month term, with an initial payment of $3,999 due at signing. This brings the total monthly cost to around $350, which is just 0.8% of the vehicle’s total price of $43,195—an excellent deal by most industry standards.

On the other hand, leasing a Rivian R1S would cost a minimum of $699 per month for a 36-month term with an upfront payment of $8,594. The total monthly cost, excluding taxes and fees, comes to about $938, representing 1.2% of the car’s value, which is still reasonable but not as competitive as the Ioniq 5 deal. 

Drawbacks of Leasing 

Despite its advantages, leasing has some significant downsides. The most notable is that you don’t own the vehicle at the end of the lease term. This means that after making years of payments, you have no asset to show for it. Additionally, there are several other factors to consider:

1. Mileage Limits: Most leases come with annual mileage restrictions (typically between 10,000 and 15,000 miles). If you exceed this limit, you may face expensive per-mile charges, which can significantly increase the total cost of leasing. 

1. Wear and Tear Fees: Leasing contracts often include penalties for excessive wear and damage. If your vehicle accumulates significant dings, scratches, or interior damage, you could be liable for additional costs at the end of the lease. 

1. Lack of Ownership: Leasing means you’re always making payments and will have to lease again or buy a vehicle outright at the end of the term. If long-term ownership appeals to you, leasing may not be the best option. 

The Case for Buying an Electric Vehicle 

While leasing is a popular choice, buying an EV has its advantages, particularly for those who plan to keep their vehicle for the long term. If you find an EV that meets your needs—offering sufficient range, charging speed, and other desired features—purchasing might make more sense financially. Ownership allows you to avoid mileage restrictions and wear-and-tear fees, and once your loan is paid off, you will have no more monthly payments. 

Related: Will Investing in Electric Vehicle Chargers Increase the Market Value of Your Home?

Financial Considerations of Purchasing 

While buying requires a larger upfront investment and higher monthly payments, the long-term financial benefits can be substantial. For example, purchasing a Hyundai Ioniq 5 with a $10,000 down payment would result in monthly payments of around $555.70 over a 60-month financing period. If you put down the same $3,999 as in the leasing example, your payments would rise to $653.27 per month. Though higher than leasing, these payments allow you to eventually own the car outright. 

Once the car is paid off, the savings become apparent. For instance, after five years of payments on the Ioniq 5, your average monthly cost over a 10-year period would drop to around $361. Similarly, buying a Rivian R1S would lead to payments of $1,537 per month for 60 months with an $8,594 down payment, but the long-term costs are reduced after the loan is paid off. 

Potential for Resale Value 

A significant benefit of purchasing is the potential resale value of the vehicle after you’ve paid off the loan. If the car is in good condition after 10 years, you can trade it in or sell it privately, recouping some of your investment and lowering your overall cost of ownership. Additionally, ownership eliminates the concern of exceeding mileage limits or incurring wear-and-tear fees. 

Purchasing and Federal Tax Credits 

For buyers, especially those purchasing EVs that qualify for the $7,500 federal tax credit, the financial advantages can be substantial. According to Joseph Yoon, a consumer insights analyst at Edmunds, if you qualify for the tax credit and plan to keep your vehicle for the long term, buying may be more beneficial than leasing. 

Should You Buy or Lease an EV? 

Ultimately, the decision to buy or lease an electric vehicle depends on your financial situation, driving habits, and desire for the latest technology. Leasing offers the advantage of lower upfront costs, access to the newest models, and flexibility, but comes with mileage restrictions and a lack of ownership. On the other hand, purchasing an EV allows you to own the vehicle outright, build equity, and avoid the fees and limitations associated with leasing.

If you expect to drive more than 15,000 miles per year or plan to keep the vehicle for a long time, buying may be the better option. If you prefer flexibility and staying current with the latest technology, leasing could be more appealing. 

Whether you choose to lease or buy, always consider your long-term financial goals, current credit situation, and how much you’re willing to spend on the latest EV technology.