President Donald Trump touted his signature tax proposals Wednesday in Las Vegas, seeking to highlight Republican wins to voters increasingly frustrated with his handling of the economy and the Iran war.
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Trump promoted the new temporary tax break for tipped wages, a provision he said he supported after speaking with a local waitress in the state with the highest concentration of tipped workers in the country.
“I think that might have gotten me this massive victory that we had in this state,” he said. “It became an overnight sensation.”
He told the crowd packed into a casino ballroom — including Ultimate Fighting Championship CEO Dana White and boxer Mike Tyson — that he had inherited a bad economy from former president Joe Biden, but argued that manufacturing investment is roaring back, though the reality is a little more complicated. He also plugged the record stock market gains during his second term and pledged that prices “are coming down very fast.”
“We had the greatest economy in the history of our country in my first term,” he said. “But this is blowing it away.”
Trump also touted temporary tax breaks for overtime and interest on auto loans, a new deduction for senior citizens, and the new “Trump accounts” child investment program, which allows children born during Trump’s second term to receive an account seeded with $1,000 from the federal government.
“Think of it, a child. In many cases, they’re born into pretty close to poverty or they’re poor. They don’t have money,” he said. Now, “they start off with $1,000, and it’s going to duplicate.”
Trump’s prosperity pitch comes amid dismal consumer sentiment and the president’s own low approval ratings. Only 39 percent of voters approved of Trump’s performance in July, while 30 percent approved of his handling of the economy, according to an Economist-YouGov poll conducted July 31 to Aug. 3.
The White House is planning to emphasize tax cuts and child investment accounts as an affirmative economic message in the midterms, acknowledging the challenge of addressing the issue that voters rate as their top concern when the ongoing Iran war aggravates inflation and fuel prices.
“We do have a record to run on when it comes to the economy,” a White House official said.
The tax break for tips can be claimed for the first $25,000 of income, while the overtime tax break is limited to $12,500, and applies to the difference between a worker’s regular wage and their overtime premium. The law also created a new $6,000 tax deduction for seniors, which Trump has referred to as “no tax on Social Security.”
All three provisions phase out at higher incomes and expire near the end of Trump’s term. Treasury has said they have been popular: More than 7.5 million people claimed the tip carve-out with an average deduction of $7,000, according to the Treasury Department. More than 29 million people claimed the overtime deduction, and more than 35 million claimed the senior deduction.
The positive economic message will be paired with attacks portraying Democrats as too far left and warnings that Democratic control of Congress would paralyze Washington.
Trump argued Republicans will win against left-leaning candidates he called “communists,” including Michigan Senate candidate Abdul El-Sayed, who defeated moderate Rep. Haley Stevens in the state’s Democratic Senate primary Tuesday.
“The communists want to take their ruinous and deadly ideology of misery and squalor to every state in America, but we’re not going to let them,” Trump said in Las Vegas.
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Polling bounced back for Trump and other Republicans in June after the president signed a ceasefire deal with Iran, underscoring to advisers how much the war had been hurting them — and raising the risk of further losses now that the deal has collapsed.
Trump’s war in Iran has fueled steady energy-driven inflation since February. Inflation slowed in June and gas prices briefly dropped amid a ceasefire between the United States and Iran, but renewed fighting in July pushed them back up.
The economy has proven resilient throughout much of the year, driven in part by larger-than-usual income tax refunds from the Republican tax bill and continued investment in artificial intelligence, even as growth began to slow in the spring.
But consumer sentiment remains well below last year’s levels, despite an improvement in July, according to the University of Michigan Survey of Consumers, reflecting weariness from years of high prices.
Voters’ persistent economic dissatisfaction poses a challenge for Republicans hoping to retain control of their narrow majorities in the House and Senate in this year’s midterm elections.
Nevada’s 1st, 3rd, and 4th congressional districts, all held by Democrats, are seen as pickup opportunities by Republicans. The state’s gubernatorial race between GOP incumbent Gov. Joe Lombardo and Democratic Attorney General Aaron Ford is also one of the most competitive in the nation.
The tax breaks for tipped wages, overtime and auto loans, and the new deductions for seniors were part of the Republican tax and spending law passed last year. That law made Trump’s 2017 income tax cuts permanent, averting an across-the-board income tax jump but also disproportionately benefited wealthier Americans, even as the law made it harder for people to get Medicaid and food assistance.
Democrats running in Nevada’s competitive districts cast Trump’s visit as a disingenuous attempt to convince voters he has fixed the economy during a news conference at the local Culinary Union office ahead of his speech.
“You feel the truth every time you go to the grocery store and the gas pump,” said Rep. Susie Lee (D-Nevada).
Greg Currier, 69, a former television entrepreneur who attended the Las Vegas rally Wednesday, said he’s lucky the bumps in the economy haven’t significantly impacted his family. He’s a fan of the president, but he’s been surprised by how expensive certain food has become, like beef and going out to eat.
“We wish [the economy] was better as fast as we wanted,” he said. “As soon as he got he prices of eggs down, nothing else happened.”
His wife Dana Currier, 39, works in retail. “People are definitely watching their budgets, spending less,” she said.
But those concerns haven’t changed how they feel about Trump. Dana said she has benefited from the overtime tax break, and Greg said Trump has delivered on reducing illegal immigration and crime.
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“This guy should take credit for it,” he said.
