Accounting
Trump pushed to embrace 17% income tax for all
Donald Trump is under pressure from economists in his circle to embrace a flat tax rate, softer trade stance and to hold the line on the state and local tax deduction.
The minds behind these proposals include Steve Forbes, of Forbes Media, former White House economic adviser Larry Kudlow and economists Stephen Moore and Arthur Laffer. The men, who aren’t official advisors to his campaign, typically emphasize unleashing the supply potential of the economy with lower taxes, and to a degree that would have been unremarkable in the 1980s but which places them outside the economics mainstream today.
The efforts demonstrate how people around the former president are already lobbying for their preferred economic policies ahead of a potential second term where both taxes and tariffs will be top priorities. Polls show voters trust Trump to handle the economy by a much higher margin than President Joe Biden.
Daniel Steinle/Bloomberg
Forbes said Monday at a New York City event that he is advocating for Trump to support a flat 17% tax rate for all income brackets with “generous” exemptions — an idea he’s pushed for decades including when he ran for president in the late 1990s. For a family of four, he said, he would suggest the first $54,000 of income be exempt from federal income tax.
Moore said that Trump hasn’t yet said he supports a flat tax, which would appear to benefit the rich. Under the current system, tax rates increase as income levels rise, meaning higher-earners are supposed to pay a larger share of their income in taxes compared to those who make less.
Whoever wins the White House in November will be forced to negotiate a tax deal next year because key portions of Trump’s 2017 tax cuts — including individual rates — expire at the end of 2025. That will set up a complex negotiation — particularly if control of Washington is split between Republicans and Democrats — that could make dozens of changes to the Internal Revenue Service code.
Corporate cuts
Kudlow praised Trump’s 2017 tax cut, which lowered the corporate tax rate to 21% from 35%, saying it was an “enormous success.” Laffer said he supports lowering the corporate rate even further, though his ideal goal is to replace the corporate income tax with a value-added tax.
Trump has told allies he wants to keep the 21% rate in place, instead of cutting it further to 15% as he previously proposed, seeking to avoid alienating working-class voters.
Monday’s event was organized by the Committee to Unleash Prosperity, a group that counts Forbes, Laffer, Kudlow and Moore among its founders and organizers, and is one of the entities regularly bringing policy ideas to Trump. They say they meet with the former president approximately every six weeks to brief him on policy ideas, share economic data and suggest names for key political appointee posts.
Laffer last month
On the campaign trail, Trump has often said he would pass the “biggest” tax cuts and claims that if he is not elected, taxpayers will see their IRS bills increase under Biden. Trump has not detailed what his tax plan would look like.
“President Trump proudly passed the largest tax CUTS in history,” Trump campaign spokeswoman Karoline Leavitt said in a statement. “When President Trump is back in the White House, he will advocate for more tax cuts for all Americans and reinvigorate America’s energy industry to bring down inflation, lower the cost of living, and pay down our debt.”
Forbes advocated for no taxes on savings and eliminating the estate tax, both changes that would disproportionately benefit the wealthiest Americans.
State and local tax
The advisors are also advocating to maintain or reduce the $10,000 cap on state and local tax, or SALT, deductions. Trump’s 2017 law imposed the $10,000 SALT write-off limit, which was previously unlimited.
That change was most acutely felt in high-tax states, including New York and New Jersey. Democrats are more inclined than Republicans to advocate for expanding the deduction, but a handful of key House GOP lawmakers representing the New York City suburbs and Southern California — districts that will likely determine who controls the House next year — also support expanding the tax break.
Moore said he also doesn’t see eye-to-eye with Trump on trade policy. As president, Trump instigated a bevy of new tariffs, on washing machines, solar panels, steel, aluminum and other goods from China, which economists say have raised prices for consumers and started tariff wars with trading partners.
“I disagree with Trump, and he knows it, on some of the tariff policies,” said Moore, who called himself a “free trade guy.”
Moore said he’s learned to live with Trump’s desire for trade reciprocity and tit-for-tat tariffs.
“The whole idea of this group is to provide President Trump and other top policymakers with the economic advice they need,” he said. “He doesn’t always take our advice, but he likes our thoughts.”
Millions more taxpayers will be receiving the Form 1099-K in the mail this year for the first time if they were paid $5,000 or more last year through a service such as Venmo, PayPal, Cash App, StubHub, Etsy and Airbnb, and most won’t be expecting it.
New research from tax automation provider Avalara found 61% of gig economy workers are unaware of recently lowered 1099-K reporting thresholds aimed at capturing unreported online sales income, Nearly three-fourths (73%) of the gig workers surveyed don’t know the payment threshold above which they would receive a Form 1099-K and be required to file an IRS tax return.
Gig workers will be looking for advice from a tax preparer. Over 20% of the survey respondents plan to pay a tax professional for the first time as a result of 1099-K reporting changes and complexity.
Last year, the IRS extended its transition relief for the new Form 1099-K information reporting threshold,
The Avalara survey found that while 61% of respondents claim to be knowledgeable about Form 1099-K and its purpose, an equal proportion of 61% don’t know the 1099-K reporting threshold is lower this year and subsequent tax years. For subsequent tax seasons on the way to a $600 1099-K reporting threshold, only 18% surveyed could identify the correct threshold for 2026 and the final $600 reporting threshold for the 2027 tax season.
The respondents offered various predictions for how they would fare from the new income reporting requirements: 37% believe their business will be profitable following tax season, 36% responded they’ll likely break even, and 17% predict they’ll lose money due to the IRS changes.
More than one-third (37%) of gig workers surveyed said this is the first year they’re receiving a 1099-K, so 21% of respondents plan to engage a tax professional for the first time. Another factor in seeking professional advice could be the number of gigs these workers are juggling: 75% of survey respondents have two or more sources of income, 45% have three or more, and 16% have four or more. Accountants and bookkeepers will be essential to helping 1099-K newbies sort out the reporting and tax implications of multiple income sources.
The survey also indicated how respondents plan to move forward after tax season. To avoid crossing the $2,500 1099-K threshold next year, over 20% of workers expect to be quitting one or more of their gig economy jobs and 19% are changing their earnings strategy, while 15% will be using tax software for the first time. Another 20% intend to take on more under-the-table work, and 15% will switch to Zelle to avoid IRS reporting rules associated with PayPal and Venmo. Some 40% of those surveyed say they’ll take on one or more additional gig economy jobs. And 16% of survey respondents said they will be leaving the gig economy altogether and pursuing different work.
“Our survey data reveals the urgent need for basic knowledge and orderly direction on the part of gig economy workers to determine how best to comply with the lowered 1099-K digital payments threshold,” said Avalara general manager Kael Kelly in a statement Thursday. “This scrappy segment of our economy demonstrates DIY drive in creating a living from engaging in multiple jobs, non-traditional work, and sometimes essential services that support how consumers want to buy and receive goods and services – and they’re now faced with the additional challenge of sorting out new, last-minute tax regulations and reporting requirements. Businesses of all sizes, including independent workers, need a fast, robust, easy, and affordable way to e-file 1099 forms, and that capability is within reach through modern cloud software.”
The global economy is poised for “reasonable, but not particularly exciting” growth this year, yet uncertainties abound, according to a new report from the Association of Chartered Certified Accountants.
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“The global economy should continue to grow at a reasonable, but not particularly exciting pace in 2025,” said ACCA chief economist Jonathan Ashworth in the report. “But it is a world marked by significant uncertainty. The risks are predominantly on the downside, amid potential changes in U.S. trade policy, a challenging geopolitical backdrop, political uncertainty and rising government bond yields.”
Economist Charles Goodhart suggested the U,S. economy may perform strongly in 2025, but Europe and the U.K. could struggle. Goodhart believes inflation could fall in the short run but will probably rebound in 2026 and 2027.
“My guess, on which I would not place a great deal of weight, is that the U.S. economy will do very well in 2025,” he said. “Both Europe and the U.K. will do relatively badly. Not only will higher U.S. import tariffs be a problem for Europe, but higher U.S. tariffs on imports from China will probably mean that China will want to export more of its goods to Europe, at a time when Germany’s business model is already under extreme stress.”
The emergence of AI agents promises new productivity breakthroughs, but hybrid solutions integrating other technologies will be crucial for sustained value, according to the report.
The ACCA interviewed seven CFOs from across the globe in various sectors for the report. While the interviewees did not appear to be expecting a notable slowing in global growth in 2025, there was some caution given the significant global uncertainty, including that related to the policies of President Trump.
“Technology, particularly AI, continues to be a priority, with businesses recognising both its potential and disruptive challenges,” said the report. “A wide range of risks were highlighted, including inflation (and changes in the price of important commodities), policy changes in large economies, cybersecurity, exchange rate movements, supply chains, climate change, social tensions, geopolitics, and fast-changing consumer habits. The latter two were also cited as opportunities. A recurring theme among CFOs is the need for agility, innovation and resilience in navigating an uncertain economic landscape.”
The ACCA also releases a quarterly
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