Lower capital gains tax, cuts in food benefits: What the 2025 plan could mean for your wallet in a Trump presidency

With the goal of “paving the way for an effective governance system,” the nearly 900-page “order” proposes federal government reform and sweeping policy changes that will affect family taxes, savings and the rest. The Heritage Foundation announced the project in 2022 and announced the policy collection in April 2023.

President Joe Biden and Democrats have pointed to Project 2025 as an example of what a second term from former President Donald Trump could look like. Biden has a page on his campaign website about the project, describing it “as a blueprint for Trump to implement.”

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However, in recent weeks, Trump has made statements that diverge from policy proposals.

“I don’t know anything about Project 2025. I’ve never seen it, I don’t know who’s in charge of it, and, unlike our well-received Republican Platform, it was unrelated too,” Trump wrote on July 11 on The Truth. Community post.

However, while Trump may not approve of this article, its creators have approved of Trump. Several former Trump staffers were involved in the creation of the playbook, and a recently released video from April 2022 shows Trump speaking at a Heritage Foundation event about the team’s plans.

“This is a great team,” Trump can be seen saying, “and they’re going to lay the groundwork and the blueprints for exactly what our organization is going to do and what your organization is going to do when the American people we are giving a grand order to save America.”

The Trump campaign did not respond to requests for comment.

“As we’ve said for more than two years, Project 2025 does not speak for any candidate or campaign,” a Project 2025 spokesperson said in a statement. “We are a coalition of more than 110 groups advocating policy and staff recommendations for the next conservative president.”

“But ultimately it’s up to that president, which we believe will be President Trump, to decide what recommendations he’s going to use,” the organization said.

A spokesperson for Project 2025 said they were not available to comment on specific proposals.

While some of the proposed changes in Project 2025 can happen through executive action, many will require congressional approval, which can be difficult in a divided government.

Here are some of the plans that will affect household finances.

The plan calls for several changes to the Supplemental Nutrition Assistance Program, or SNAP, a federal government program that provides money for low-income people to buy food for themselves and their families.

Under one proposal in Project 2025, multiple recipients could face work requirements in order to receive their benefits. Another plan calls for closing a “loophole” where people can sign up for food stamps if they’re already getting another benefit, such as Temporary Assistance for Needy Families, or TANF.

The Biden administration’s move to increase food stamps for families during the pandemic is being described as an “extraordinary move” by the project’s authors. They also called on the next conservative president to “reject efforts to turn federal school meals into an entitlement program.”

These changes could have negative effects on families, said Salaam Bhatti, director of SNAP at The Food Research & Action Center.

“Cutting this critical part of our safety net will increase preventable poverty-related hunger, result in negative health outcomes, increase health care costs and reduce efficiency of education among students whose families rely on SNAP to put food on the table,” Bhatti said. .

The 2025 plan calls for major cuts in the US Department of Education’s loan forgiveness programs for student loan borrowers.

It would end the Public Credit Relief Initiative, which provides debt relief to nonprofits and government employees after ten years of payments, and the Borrower Protection Act , which provides a way for defrauded students to get debt relief.

The Biden administration’s new repayment plan for student loan borrowers, known as SAVE, would also end under the project’s provisions.

“If Donald Trump is given the chance to implement this right-wing manifesto, it will destroy the economic stability of millions of borrowers and their families,” said Aissa Canchola Bañez, political director for Protect Borrowers Action.

After 2025, many of the provisions made by Trump in the Tax Cuts and Jobs Act, or TCJA, are set to sunset, including lower tax brackets, a larger itemized deduction, an enhanced child tax credit and credits high quality goods and gifts. others.

While Trump has called for a full extension of the TCJA, the 2025 Plan proposes a “simple dual tax system” of 15% and 30%. The latter would start the base Social Security salary, which is $168,600 for 2024.

The plan would also eliminate many deductions, credits and exemptions, including tax breaks for state and local taxes and education.

If it were to become law, some taxpayers would pay more and others would owe less, depending on their current income, credits, deductions and deductions. of them, explained Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Institute.

The second tier could include some form of consumption tax, levied on goods and services, such as a national sales tax, a business transfer tax or others, the plan said.

But historically, “consumption taxes have not been available to Congress,” Gleckman said.

The 2025 plan would cut taxes on capital gains and qualified dividends for high earners. The top rate is currently 20%, and the offer requires 15%.

The plan would eliminate the so-called net investment income tax, or NIIT, an additional 3.8% tax on assets once adjusted gross income, or MAGI, exceeds $200,000 for single filers or $250,000 for couples joining together. Including NIIT, top earners currently pay 23.8% in capital gains.

If enacted, the proposal would represent “a huge tax cut for people who make their money in investments,” Gleckman said.

Although retirement is not a primary goal of the 2025 Plan, the plan requires “global savings accounts,” or USAs, with an annual tax-deductible contribution limit of $15,000, which indexed for inflation.

The tax treatment will be similar to Roth retirement accounts, which offer tax-free earnings after age 59½, with some exceptions. In comparison, the USA would be “more flexible” for investments, and profits could be withdrawn “at any time for any purpose,” according to the plan.

While some policy experts support the USA, others argue that low-income people struggle with voluntary retirement contributions and may not benefit from the proposed annual limits. and a year.

Alicia Munnell, director of the Center for Retirement Research at Boston College, said: “The first of the three points is well taken care of.” “We don’t need to provide any additional funding for that group.”

In a July 9 post on X, Project 2025 said the plan does not advocate reducing Social Security.

But the order describes balancing the federal budget as a “most important goal.”

With growing concerns about the existence of the Social Security fund, “there is no way these two statements match,” Munnell said.

The Social Security Fund has a projected depletion date of 2035, the trustee’s annual report showed in May. This can result in a benefit reduction of at least 20% on that day without action from Congress.