BREAKING: Trump Announces Biggest Potential Tax Cut in History

Foreign. President Trump has now announced his official tax policies now that he's in the White House. Of course, we've been hearing about all of the tax policy he's he wanted to implement if he got back to the White House. And here we are. It's exciting for us geeks out there that are tax professionals. This is like Christmas, the beginning of opening all these presents. So I'm here to break it down for you. My name is Mark Kohler. I'm a CPA attorney, best selling author and my last book was when the Tax Cuts and Jobs act came out. The first go around. Well, I'll be having another book come out this year. And people, I want to be your source. If you'd like to stay tuned with me, stay in tune on this topic. Stay in touch with me on all my social platforms and on YouTube subscribe and whenever I go live or make a post on X, you can get into the conversation and get updates on a regular basis on this topic. This is huge. This is so important for the average American. Every American needs to know how this could play out. I've got seven things that we need to talk about today. I'll be breaking these down on a regular basis as we get more information and more news. President Trump went to the Hill today to talk with GOP leaders and ask for or demand these provisions in a new tax bill. So here's the seven topics. I'm going to break these down in detail. But here's what we are looking at right now. Just on the face of it, no tax on tips, no tax on Social Security benefits, no tax on overtime payment. We're going to renew a variety and this is where we're going to get more information. He wants to renew multiple tax cuts from the 2017 Tax Cuts and Jobs Act. We're going to renew those and then we're going to adjust the SALT cap. That's the state and local tax cap that's currently on the 1040 tax return. We want to raise that. Number six, he's going to eliminate the carried interest loophole. I'll explain that in a moment. And then eliminate tax breaks for billionaire sports team owners. Now, I've been studying these topics for months as we've been leading up to this moment to start seeing pen to paper, let's get into it. Number one, no tax on tips. Now what does that really mean? What does that mean for all of us and the economy? Well, right now it's estimated there's 4 million workers that report TIP earnings. Right now, 4 million Americans and they're reporting it averaged about $24 billion a year over the last 10 years. And the IRS believes that 45% of TIP wage earners aren't even, they're not even reporting more than 45% of all the tips they receive. That's, they're taking that cash under the table. So why is this important? Because if a worker is now not taxed on those tips, they don't have to hide that money in their back pocket. So now they can report it. It's going to make them stronger on their taxes, return to get loans, buy homes, build wealth, build a business. Because now they're coming out of the dark. And if we can have this appears to be near $50 billion reported and not taxed, that's going to free up a lot of opportunity for workers to build their American dream too. Now what's interesting here too is that they are not taxed on it, on their income tax. That's the proposal. They, if they report it, they will still pay their fica, their Social Security, Medicare. This is a good thing because we're trying to save Social Security, which President Trump has said he is not going to cut any Social Security benefits, no Medicare benefits, and he doesn't even want it taxed. But that's going to come at a cost. So if wage earners that would previously not report their tips because they didn't want to pay tax on it, at least report it for Social Security reasons so they can have a stronger financial statement. That could be a good thing. We'll see. Now let's talk about no tax on Social Security. This is pretty shocking, but over half of retirees that receive Social Security rely on Social Security for more than 50% of their retirement income. So think of all the Social Security people receive Social Security, more than half of them. Social Security pays for more than 50% of their cost of living. That's, that's, that's a big deal. So any savings here is going to change their lives dramatically. Now the currently you are not taxed on Social Security if you make less than 25,000 single, 32,000 married, so medium to higher income, however you want to define that are not paying tax are the ones paying tax on Social Security and will receive the benefit here. So these middle income Americans are going to really see this benefit. Now over half of those receiving Social Security are not even paying tax. It's only about 50% of retirees are paying tax on Social Security. It is estimated that that would, that's 355. No, let me say that we're going to come back to this. That's $100 billion in tax cost. So let's look at the ramification here. If we're not going to tax Social Security, that's great. That's awesome. But that's $100 billion in tax revenue we're not going to get that would normally maybe go to help extend Social Security. So it does not, it's not wasted by 30, 20, 34 is when they think security will be over with if changes are not made. But by freeing up this income for a very important piece of our American workforce, our retirees, this is going to be huge on their bottom line. Now, number three, overtime. What's interesting with overtime is that there's over $355 billion in wages reported on the tax returns right now. This is from the IRS in overtime income, 355 billion. Their estimate is about a 23.8 or no 20% approximate tax rate on that on average. And so it's going to cost around $67 billion to not tax overtime either. See, and this is where it's important to realize this sounds great. We're not going to tax Social Security, we're not going to tax dips, we're not going to tax overtime. Well, that's revenue that's now not going into the federal treasury. So this is where the magic that President Trump's hoping on is that if we can save money in other areas with DOGE and also charge other countries that are not taking our products in their country and tariff their products, if they're just going to come over here and sell but not play fair, those tariffs and there's cost savings in our government will hopefully and it should make up for these benefits to the average middle class American. Now let's jump to this one on the carried interest loophole and tax breaks for sports team owners. This is interesting. Trump is not giving breaks to billionaires on his demands on the Capitol Hill. In fact, he's doing the opposite. He wants to tax billionaires more. And wow, that's something we don't hear very often, right? At least in mainstream media. So this is interesting. So if you look at it was interesting in 2021, ProPublica did a piece on the tax strategies of pro sports teams owners and there was a game in LA and they took Adelaide Avila, a 50 year old bartender and she was working in the stadium and made $44,000 that year. Her tax rate was 14.1%. So just a regular worker Serving drinks in the stadium made about 44 grand. Paid 14.1% tax. Now, on the court, LeBron that year, 2021, made 200 million and his tax rate at the end of the day was 34.8%. Okay, all right. Paid twice as much in tax, percentage wise, than Adelaide. Now, the most wealthy person in the building was Steve Ballmer, the owner of the Clippers, and had a income of $1 billion that year and paid only 11.6% in tax. Pretty interesting. So the one billionaire in the room paid less tax, effectively, than Adelaide. Well, Donald Trump says no more. No more tax breaks for these billionaires and he's going to pay his fair share as a percentage. That's what we mean when we hear you need to pay your fair share of a percentage of what you earn. So we'll see how that turns out. Kind of exciting to see. There's a lot of little things there that pro team owners do to save taxes on. Break those down for you further. The carried interest loophole is a trick of investment managers. They get to pay a lower tax rate. They pay a lower tax rate on interest. They earn compensation for managing the fund. This interest, 23.8% rather than 40.8%. They almost get a half, pay half as much as a percentage on this income because of this loophole. And it's of course, for the wealthy. And President Trump says no more. Now, see, these strategies add more money to the treasury so he can offer these other benefits on overtime, Social Security and tips. Now, the salt cap, this estate and local income tax deduction is for those that itemize their tax returns. So if you live in a state that has very high state tax, like New York, California, Illinois, you're paying a lot in state tax. And you used to be able to deduct that on your tax return. It's capped currently at $10,000. It's brutal. So a lot of people that own homes and that's and have interest payments on their homes and also pay state and local tax would love to itemize, but they're limited. And so these provisions are also. Donald Trump's asking to change these. And so we're going to see how that plays out as well. Now, this last One is these 2017 middle class tax cuts. Primarily what Donald Trump campaigned on is that we're going to extend the lower tax brackets. And these tax brackets, very, very important. I've got them all right here. Currently are between 10 and 37%. And he wants to keep that. Next year it will go back to 39.5% as the highest. And then the middle brackets go jump up by 3 or 5%. So it'll go from A, instead of 12% in the middle, it'll go up to 15 or 22, it'll go up to 25. Those are real numbers for middle income Americans. So Donald Trump says, nope, we want to keep these down and not see them climb back up, which they will automatically do next year unless the GOP answers his call. So we've got these seven demands from the White House. He's up on the Hill right now trying to negotiate this for Americans to see if we're going to get what he is claiming, the biggest tax cut in history. Well, folks, I want to take your questions. If any of you have a question right now on YouTube, Facebook, Instagram, I think we're live on several places. Let's see what questions you might have. And if I can answer them, I've got a crystal ball over here. So I'll be able to tell you everything you need to know. It's gonna, it's gonna be great. All right, what do we have, Dana?

Alright, so our first question, we actually have a lot of questions here about tariffs. The sentiment is basically so we as the middle class end up paying these tariffs at the end of the day. Can you talk a little bit about that?

You bet. No, this is a big misnomer. I believe that mainstream media wants to make this tariff issue a bad thing when really there's a whole other perspective. So let me share one. I was just in Davos in Switzerland three weeks ago at the World Economic Forum. That's right, little old me, Main street tax lawyer representing small business owners in America went to Davos and this was a big topic. Tariff terror is what they're calling it, because people hear tariffs and they freak out. And those that think they don't want to pay tariffs want to villainize President Trump for trying to do this and say, okay, if you're going to tariff, we're just going to increase our prices. Well, in this tax cut package that I didn't bring this up yet. President Trump has said, I want to do a tax break on US Made products and pay for it with tariffs on countries that bring their crap into our country and sell it, but won't let us go sell our stuff in their country. And so he's like, that's not fair. All I want to do is level the play field. For those of you that have equal trade with us, there's no tariffs, there's no tariffs. And so I was talking with the prior ambassador to Switzerland and for the on the US side and he's like, the only countries that are nervous are the countries that are taking advantage of the US consumer selling their stuff and not willing to allow us to sell our products in their country. They're the only ones that are nervous. So that's what's going on. And they're going to try and scare the American public into thinking that you're going to pay more for your product if we have to pay tariffs to get it here and what the goal is. And again, this is world economic stuff and it's probably above by pay grade 2 to try to explain it or understand it. This will equal out when we can provide tax cuts, tax breaks for American made products and benefits for countries that want to bring their products to our country and allow us to make money taking our products to their country as well. In the end, our economy grows. And this tariff terror is a propaganda technique in my opinion. And I gotta have opinion. You can have an opinion, you can say, no Mark, you're wrong. And that's okay. So next question.

Dana, the next question is why just sports team owners and not people like Elon Zuckerberg, Gates Trump, Oprah? Why only sports team owners?

Well, sports team owners have a very some unique strategies. Great question. Let me tell you why all of you that are sports team fanatics, what do they do every 20, 30 years for a sports team that has an old stadium? They cut them deals. They say, you know, we need this big new stadium and we need this and we want to attract a team to come to our city and we're going to roll out a red carpet for them. And they go to team owners and say we're going to give you tax breaks if you bring your team to our city. If you'll build us a new billion dollar stadium. Now that's an investment, I get it. And they want the team owners to come to their city and bring a new team and build a big ass stadium and recruit the best players and bring that pennant home, right? Well, there's a lot of loopholes created to give them those incentives to do that. Special breaks on interest and bonds and capital investments, depreciation and write offs when they go build these big facilities so they can take those write offs of that capital investment and offset their income from the team operations and drive down their effective tax rate. Now a team owner, their counter argument is, yeah, why don't you go build a billion dollar stadium and create all these jobs and bring players and all the ancillary businesses that come with it. We're stimulating the economy in that city. Damn straight. I want a tax break. That's their argument. So who's right, who's wrong, what's fair, what's not fair, I don't know. But I'll just say this. If you're making big money and you've got taxable income, there's a tax bracket and I get some loopholes to help stimulate the economy. But these are pretty incredible loopholes. And I, you know, if I go build a home and rent it out and create some affordable housing, I get some good depreciation write offs. I'm with you. But when you start adding six or nine zeros to that, I don't know. So that's why they're getting Donald Trump said not. It's gone too far. We need to bring back some of those tax breaks and that billionaires of these sports teams can pay a little bit more. Okay, another, maybe it's because it's Mark Cuban too. I don't know.

That's what a lot of people in the comments are saying.

Actually there's a little piston match going on there.

I don't know that that has come up a lot in this comment section. Another thing that's coming up a lot in the comment section right now is that people understand that that's the goal. But the real question is, who is going to pay all for all of this now?

Okay, great question. But now when they say pay for all of this now this is right where the government giveth, the government taketh away. Because see, it's got to have a balanced budget within 10 years. So when you start saying we're not going to tax Social Security at a cost of 67. No, at cost of $100 billion a year, that's going to be a trillion in 10 years of cost. That's tax money that's not coming in. So how do we make up for that? Four letters, Doge. Okay, you see, this is the master plan. And think about your own household. It's like a house. And I know it seems crazy with all these zeros and trillions and billions and all this crap, but just think about it. You've got a home, you got an apartment, maybe you rent somewhere and you've got costs. You've got a house, maybe you've got electricity and HOA fees and garbage and all these utility bills and you like to doordash. Yeah, doordash is so convenient. I think it's the best. I think I just love doordash. But it is the worst thing for my budget because if I go to the grocery store, even though groceries are expensive right now, try doing doordash twice a day. Right? Your budget will go through the roof. Well, let me see. I need to go pay for, you know, a new roof. I, you know, my roof's getting a little beat up. There was some hailstorms and it's been beat up. I need some money to go pay for my roof, and that's a really good thing to spend money on. Where am I going to get it? Oh, maybe I'll save money over here on doordash so I can use that money and deploy it over here for something that's maybe a better situation than me eating terrible food on doordash. So that's the theory. Let's get some tech company billionaires that understand how to save money in a big corporation and come in and save us some money by getting rid of waste and maybe fraud and some bad things that could be going on there. And let's take that savings and pay for some tax breaks. That's the theory. We're going to save money on doordash so I can invest in my house. We're going to save money on crap we shouldn't be spending money on maybe, or just basic inefficiency and give it back to the American people where they can spend it where they want. Oh, and by the way, if you're a country that sells your stuff here and won't let us sell on yours, we're going to tariff you and use that money to pay tax breaks. See, it's gonna. Yeah, maybe a tariff will increase an electric razor made in Japan or made in China, I don't know. But boy, that razor went up by $3. But I just saved $3 in taxes over here. Okay. If it doesn't equal out, it stimulates our economy at the end of the day at the very least. So hopefully that makes sense. Little economics there. Next question.

Very exciting. So another thing a lot of people are asking here is if you could just kind of explain a little bit how exactly this is all going to benefit the middle class, specifically.

Oh, okay, middle class. How do you benefit here? First of all, half. Okay, let's just talk Social Security. Middle class retirees are the ones that pay on Social Security benefits. The bottom half of retirees that don't. 50% of retirees do not pay tax on Social Security. They don't make enough. The people that are paying Tax on Social Security right now, are retirees making more than 50 grand a year. Okay, so there's, number one, if you're a retiree middle class and you have Social Security benefits, you're going to save tax there. Number two, next year, the tax rates are going back up across the board. The one demand here of several of President Trump is we want to keep those tax rates down for middle income Americans. I've got them right here. That's going to mean a 12% bracket instead of 15%, 22% bracket instead of 25, 24 instead of 28. And those are the brackets right in the middle between 94,000 a year and 300,000 a year. So that middle break, all of you are going to see a 3 to 4% tax rate savings. Next, the SALT deduction. SALT, 10 grand for state and local taxes. Give me a break. So if that's even doubled, you're going to see tax savings there. And middle income Americans pay more state tax now you can deduct it on your tax return and save over time. $355 billion in earnings last year in overtime. Just in overtime. That's a lot of people working hard. And no tax on that. Are you kidding me? Now that again, an estimated cost of 67 billion to get through that out there. So Doge, get to work. Go save us some money somewhere so we can get. So we're not paying tax on overtime. So whether you're a middle income, middle class American working harder hours during the week, maybe you have tips, a job that allows for tips. Maybe you're a retiree collecting Social Security or just wanting to write off your state tax or have a lower tax rate. That's what it is. And guys, isn't it crazy? And he's going after the billionaires, he's going after the hedge fund managers and saying, we need you to pay for this. Isn't this weird? This is not what we were told he was going to do. From others. He was saying he was going to do it, now he's doing it. It's kind of weird, right? Next.

All right, we got another question here. Can you explain where the money is going when we pay taxes? Because it's not used properly at all. Sending $3 billion to other countries.

Yeah, so it goes into the federal treasury, which is our federal budget that they fight about every year. I love Mike Lee, Senator Mike Lee, that talks about the firm, who are the leadership in the House and the Senate that pretty much ramrod that budget down our throats every year. And that's got to change as well. We have a new leader in the Senate that's going to hopefully make that happen. And that budget is what Elon Musk and his team at Doge, hundreds, if not thousands of workers now are sifting through that budget to find out where the hell that money's going. And it's scaring a lot of people that don't want that uncovered. And so choose your news source carefully. I don't believe everything I see. I read, I verify, I read, I verify. I do the best I can. This is crazy stuff going on right now. But that budget is what Doge is trying to figure out. Where is all that money going? To some great places. I know it is. It's also going to some crazy places. So that's budget. If we can bring down the cost, like Mark Kohler not ordering DoorDash three times a day, if I can save some money, then I can deploy that money somewhere else and give it back in tax breaks. So that's the goal. That's how it's going to play out. And guys, we're into this three weeks. Three, four weeks. This is crazy. And I'm going to be right by your side all year long breaking down this mystery of the tax savings and the costs and how it's all going to gel. And please, if you haven't subscribed already on my YouTube channel or follow me on X or on Facebook or whatever, I'm going to be everywhere trying to explain this on a daily basis, at least weekly, and be that source for you to just have it make sense because it can get really complicated. Maybe a couple more questions.

Another I was actually going to bring up and you kind of started to touch on this already, but a lot of people are asking very specific questions. How do I write off tips? Should I form an S corp? How does a small business do this or that? And people on Instagram are actually asking where they can see more of you.

Oh, gosh. Thanks, guys. These questions on how to have an S corporation how to write off tips if you're paying tips. See, the only way you write off tips is if you're paying someone else tips. And when you go out for dinner in your small business, you get to write off the tips. You pay. You get to write off the bar tab. You get to write off the whole meal, even if you just pay for yourself. You don't have to pay for others, but you have to have a business purpose for that. I love to talk about writing off meals, travel, dining, Your home office, put the kids on payroll. Let's go out, make money in real estate. Let's save taxes on crypto trading. Guys, I have hundreds of videos on YouTube where I break down all sorts of strategies. And you can just binge away on that. Be careful. The videos where four or five years ago where I had shorter hair. I'm working on my Matthew McConaughey look. So that's kind of the newer look you'll see. You'll be able to see the older videos. But, guys, there's so much out there. I've got best selling books on Amazon. I have a podcast called the Main street business podcast. Over 400 episodes, millions of downloads. So here, here. And I want to just say, I give away so much free content. Just go start absorbing it. I want to help you live your American dream. I'm America's small business tax lawyer. No one has more downloads, more books, more podcasts, more videos in combination than me. And I love you, and I love Main Street America. So have a source. You. You may hate my style. That's cool. Find someone else. But this is the number one cost in your life. And if you're trying to live that American dream, you got to get a source on it to just kind of dial it in a little bit. So, everybody, thank you so much for being here. I go live every week. I'll be here next week going live, and I'll be producing more and more content on these topics. And I want to tell you the American dream is real and it's hard. And I. Last night, I was working until midnight. I work almost every night as well, trying to live my dream. And then I go play hard. I love to work hard and play hard, and that's okay. And as a small business owner, I'll be right there by your side, so don't give up. Thanks so much. And I'll see you on the backside.