Donald Trump’s political instincts have led him to the brink of a transformative tax plan. He has made the elimination of taxes on overtime pay, tips, and Social Security benefits—three of his signature campaign promises—a top priority in the reconciliation bill that Congress is now moving to pass, though the Social Security reform has taken the form of a deduction. The president intuitively understands that Americans deserve to keep a bigger share of their income. But instead of pursuing one-off exemptions, he should fundamentally rethink how our country taxes people—and what our tax system is designed to achieve.
Trump knows that the less the government takes from your income, the better. His proposals on overtime, tips, and Social Security would give people more of the last share of their money—i.e., the extra hours they work, the extra income they make, or the extra money they make in benefits after they retire. But the better idea is to let people keep the first share of what they earn.
