Pro Tips
Everything You Need to Know About Trump Taxes
Apr 9, 2025
There's no doubt that taxes were a significant part of Donald Trump's 2020 Presidential campaign and subsequent presidency. His tax policies affected many people, from the wealthy to corporations to everyday Americans. Many of these changes are still in place and could significantly impact your wallet in the coming years. In this guide, we’ll break down everything you need to know about Trump’s tariffs 2025 so you can prepare for any upcoming changes.
Before we begin, check out GoMoons’s AI-powered economic calendar. This tool can help you track any critical dates related to Trump Taxes, so you can stay ahead of any upcoming changes and know how they might impact your finances.
Table of Contents
What Are Taxes and Why Do They Matter in the Economy?
A tax is a mandatory financial charge a government imposes on individuals, businesses, or transactions to fund public expenditures. Taxes are not optional; failure to pay them usually results in legal consequences. But more importantly, taxes shape how money flows in an economy, which is why financial markets react so strongly to tax policy changes.
Types of Taxes and How They Work
There are several major types of taxes, each with different effects on individuals, businesses, and markets.
Income Taxes
Levied on the wages, salaries, or investment income of individuals. In the U.S., the federal income tax is progressive; higher earners pay a more significant percentage.
Why it matters: Reducing income tax (especially for the middle class) increases disposable income, which can boost consumer spending, a key driver of GDP growth.
Corporate Taxes
Imposed on business profits. Lower corporate taxes increase business earnings, promote hiring, and attract foreign investment.
Why it matters: Reducing corporate tax rates often raises stock prices, strengthens the local currency (due to repatriated capital), and can increase risk appetite in forex and crypto markets.
Capital Gains Taxes
Applied to profits from selling investments like stocks, real estate, or cryptocurrencies, often taxed at a lower rate if held long-term (e.g., over one year in the U.S.).
Why it matters: Lower capital gains tax encourages more trading and long-term investing. It can lead to bullish runs in equities and crypto.
Payroll Taxes
Deducted from wages to fund social programs like Social Security and Medicare. Employers and employees both contribute.
Why it matters: Cutting payroll taxes increases net take-home pay, potentially lifting consumption and business productivity.
Consumption Taxes (Sales Tax, VAT)
Applied to the purchase of goods and services and regarded as regressive because lower-income earners pay a higher share of their income.
Why it matters: Raising consumption taxes can slow spending, while tax holidays or reductions can stimulate short-term demand spikes.
Why Taxes Matter in The Economy
Taxes do more than just fund the government; they steer the direction of the entire economy by altering incentives and shaping financial flows. Here’s how:
They Influence Consumer Spending and Saving
Lower taxes = more disposable income → higher spending → GDP growth. Higher taxes = reduced consumption → slower growth, possible recession Traders track this to forecast inflation, interest rates, and retail performance
They Affect Business Expansion and Hiring
Lower corporate taxes encourage investment, expansion, and hiring. Higher taxes discourage R&D or offshoring to avoid tax burdens. This impacts sectors like manufacturing, tech, and energy, with ripple effects in equity and forex markets.
They Alter Investment Behavior
Tax policy changes can shift capital flows: Lower capital gains taxes equal more stock or crypto speculation, while higher investment taxes equal a move to safer assets or overseas markets. Crypto traders, for example, are susceptible to IRS rulings and changes in capital gains.
They Shape Government Fiscal Policy
Tax cuts are government stimulus (more money in private hands), and Tax increases are austerity (used to reduce deficits). These decisions influence central bank policy, especially in the U.S., where the Federal Reserve reacts to fiscal trends when setting interest rates.
Taxes and Market Reactions: The Trader’s Perspective
Tax policy changes cause sharp movements in:
Forex markets
If the U.S. cuts taxes and spurs growth, → USD strengthens.
Equities
Lower business taxes → corporate earnings rise → stock indexes climb.
Crypto
Lower capital gains or more explicit IRS guidance → increased inflows to BTC, ETH, and altcoins.
Bonds
Tax-driven inflation or stimulus → bond yields rise → price volatility.
Example
In 2017, when Trump signed the Tax Cuts and Jobs Act, the USD rose, the S&P 500 hit new highs, and repatriation of offshore corporate cash caused capital inflows that shifted the bond market.
Related Reading
• Trump News
• Tariffs
• Trump Tax Plan 2025
• Trump Tariffs Canada
Trump’s 2025 Tax Agenda
A Closer Look at Trump's 2025 Tax Proposals and How They Affect the Economy
Trump's 2025 tax plan is extensive, and its numerous provisions affect consumption, investment, capital markets, and labor dynamics, all of which traders in both forex and crypto markets watch closely.
Permanent Extension of TCJA Provisions
The 2017 TCJA lowered personal income tax rates, raised the standard deduction, and increased estate tax exemptions, but many provisions expire in 2025. Trump's plan would make these cuts permanent.
Why it matters
Keeps more disposable income in consumer hands, potentially increasing retail sales, services sector growth, and inflation. High-net-worth individuals benefit from sustained estate tax breaks, supporting luxury markets, real estate, and high-level investment flows.
Market angle
Forex traders might price higher inflation and stronger consumer demand, influencing USD strength. Crypto investors may respond favorably to a pro-consumer and pro-investor environment, especially in the altcoin and DeFi industries.
No Taxes on Tips and Overtime Pay
This proposal is a populist move aimed at service workers and blue-collar voters. It would eliminate federal income tax on tipped wages and overtime hours.
Why it matters
Increases take-home pay for working-class Americans, likely resulting in higher consumer spending. Critics warn this may lead to wage reclassification, where employers cut base pay and rely more on untaxed overtime or tips.
Market angle
It could stimulate near-term GDP growth and consumption. However, it may also inflate labor-intensive sectors, creating volatility in retail stocks, restaurant chains, and service-based ETFs. Forex traders might expect the Fed to react with tighter monetary policy if consumer demand overheats.
No Taxes on Social Security Benefits
This proposal eliminates income tax on Social Security income.
Why it matters
This could boost retiree spending power, leading to higher housing, travel, and healthcare demand. However, this would strain the Social Security Trust Fund, potentially prompting long-term concerns over fiscal solvency.
Market angle
More consumer demand is short-term bullish for USD and U.S. equities. If the debt outlook worsens, long-term deficit concerns could weaken the dollar. Gold and BTC could benefit from debt-driven dollar uncertainty.
Repeal of the SALT Deduction Cap
The TCJA capped state and local tax (SALT) deductions at $10,000. Trump's plan would fully repeal that cap, which would appeal primarily to high-income earners in high-tax states like California and New York.
Why it matters
Provides tax relief for wealthy taxpayers, encouraging capital redeployment into stocks, bonds, and crypto. Critics argue this favors the rich and could increase income inequality.
Market angle
This could spark inflows into investment vehicles (e.g., hedge funds, tech stocks, and high-risk altcoins) and boost real estate demand in high-tax states.
Business Tax Provisions
Key business tax provisions include restoring 100% bonus depreciation—allowing businesses to write off asset purchases instantly—and maintaining GILTI (Global Intangible Low-Taxed Income) and FDII (Foreign-Derived Intangible Income) tax treatment.
Why it matters
Strong incentive for capital investment and domestic expansion. Encourages U.S. multinationals to retain or repatriate profits, strengthening domestic balance sheets.
Market angle
I am bullish on U.S. equities, especially tech, manufacturing, and logistics. Repatriated capital strengthens the dollar in the short term, increasing USD demand. If tax relief sparks speculative capital inflows, BTC could lift.
10% Universal Tariff on Imports
Trump's tax plan includes a 10% flat tariff on all imports, effective April 5, 2025.
Why it matters
Tariffs act like a tax on consumers, as importers pass higher costs to buyers. They stimulate domestic manufacturing but raise prices on electronics, vehicles, clothing, and essentials. This may cause retaliation from trade partners, creating global volatility.
Market angle
Bullish for domestic producers. Bearish for global risk sentiment, EM currencies may weaken. Forex traders closely watch USD/CNH, USD/MXN, and EUR/USD. BTC could benefit from protectionism-driven dollar skepticism.
Budget and Economic Impact
Deficit Implications
If passed in full, Trump's tax package would increase primary deficits by $5.1 trillion over 10 years, far exceeding the $2.8 trillion cap allowed under the House budget reconciliation rules.
Why it matters: Large deficits without matching spending cuts may increase U.S. borrowing, push up long-term Treasury yields, and force the Fed to choose between inflation control and debt support.
Market angle: Forex traders may anticipate a weaker long-term dollar if deficits widen sharply. Crypto traders may turn to BTC, ETH, and stablecoins as a hedge against dollar dilution.
GDP Outlook
Some forecasts estimate long-term GDP could increase by 1.1%. However, much of that growth could go to foreign investors via higher U.S. interest payments.
Why it matters: A short-term economic bump is likely but not evenly distributed. Raises questions about who benefits from the tax plan: U.S. workers or global creditors?
Political Developments and Uncertainty
The House and Senate use budget reconciliation to pass the plan without needing 60 Senate votes. Republican divisions remain over the tax cuts' size, fairness, and feasibility.
Why it matters: Political instability adds headline volatility, expect market swings around key Senate votes, committee reviews, and debates.
Traders should: Use GoMoon.ai to set alerts for "Trump tax vote," "Senate budget deal," or "IRS capital gains changes." Watch for high-impact events scored 7+ to prepare for volatility in USD, equities, and crypto assets.
GoMoon transforms economic calendar data with AI-powered insights for smarter trading decisions. Our platform analyzes global events and rates their market impact on a scale of 1-10, helping you understand how they'll affect various assets. We've packed everything traders need: Live economic event streaming, custom notifications, and historical event replay with TradingView charts. What sets us apart is our comprehensive approach to event analysis.
Whether you're tracking the impact of major economic announcements or comparing forecast data with actual outcomes, GoMoon provides clear, actionable insights. You can personalize your calendar, stream live meetings directly on the platform, and analyze historical events like the dot-com bubble or COVID-19 crash to understand market reactions better. GoMoon clarifies the complex world of economic events for traders seeking data-driven decisions. Get started for free to get AI-powered economic insights today.
Related Reading
How Traders Can Trade Trump’s Tax Policies Effectively
A. Tracking Trump’s Tax Policy Shifts with GoMoon.ai
Every significant change in tax policy alters market expectations and creates trading opportunities across asset classes. GoMoon.ai gives traders a potent edge when navigating unpredictable economic headlines, including tax-related events. The platform's real-time tracking helps traders understand how Trump tax policies impact various markets, so they can position for profits before the rest of the market catches up.
How to Set It Up for Tax Trading
Custom Alerts: Track keywords like Trump tax cut, capital gains, SALT repeal, corporate tax, IRS crypto, social security tax, and bonus depreciation.
AI Impact Scoring: GoMoon rates tax-related headlines and events from 1 to 10. Use this to filter noise and focus only on events likely to move the market.
Historical Replay: Study what happened during the 2017 TCJA rollout, Trump’s 2018 tax-linked Fed comments, and Q1 2025 budget negotiations. This helps you recognize familiar setups and repeatable trades.
Calendar Sync: Align your trading sessions with live tax policy events, such as: White House press briefings, Congressional votes on tax reform, and Federal Reserve reactions to fiscal policies
B. Trading Strategies for Forex Markets
The forex markets often react quickly to changes in tax policy, especially those that impact the U.S. economy. Here are three strategies to consider.
1. USD Strength Play on Pro-Growth Tax Policies
Why it works: When the U.S. cuts taxes, especially for businesses or high-income earners, it attracts capital flows and boosts consumer demand, potentially strengthening the dollar.
How to trade it: Long USD/JPY, USD/CAD, or USD/CHF on confirmation of tax-cut news
Use GoMoon sentiment scores above seven as trade triggers. To confirm the setup, look for rate-hike expectations in bond markets.
Caution: If deficits spiral and the Fed turns dovish, the USD may weaken over time, so monitor the central bank's language.
2. EUR/USD or GBP/USD Pullback Strategy on Tax Hype
Why it works: If markets overprice U.S. tax cut optimism, you can catch the retracement once the narrative cools.
How to trade it: Short USD pairs after an initial spike, once euphoria fades. Combine with weaker U.S. data (e.g., jobs or GDP), Target 50% or 61.8% Fibonacci retracement. Ideal conditions: If a tax bill passes but faces budget pushback or long-term cost warnings.
3. Inflation Hedge via USD/Gold or USD/CHF Inversions
Why it works: If tax cuts trigger inflation (via increased spending), real yields fall, and investors move into inflation-resistant assets.
How to trade it: Short USD/CHF or long Gold/USD during inflation spikes. Confirm with CPI or PCE data. A GoMoon impact score + inflation commentary = green light
C. Trading Strategies for the Crypto Market
The crypto market thrives on speculation, so tax policy changes can create volatility that savvy traders can exploit. Consider these three strategies.
1. Long Bitcoin on Capital Gains Reform
Why it works: Trump’s potential to lower or eliminate capital gains taxes on crypto can make BTC and ETH extremely attractive to new investors.
How to trade it: Buy BTC or ETH after a high-impact GoMoon alert on crypto tax relief. Watch on-chain flows for USDC/USDT spikes (bullish signal). Enter early before retail adoption spikes.
Exit strategy: Sell into strength after 10–20% gains or upon policy reversal rumors.
2. Altcoin Rotation Strategy on Risk-On Tax Narrative
Why it works: Lower tax burdens encourage risk-on trading, especially in high-volatility assets like altcoins.
How to trade it: Track sentiment shift with GoMoon. When BTC shows strength on tax news, rotate into trending altcoins (SOL, AVAX, MATIC). Use tight stops; altcoins pump and dump faster.
Exit rule: Close positions before the next macro risk event (e.g., FOMC or CPI release).
3. DeFi Surge During SALT Cap Repeal or Payroll Tax Cuts
Why it works: Tax relief for higher earners and wage workers gives them more capital to deploy, including into DeFi products and staking protocols.
How to trade it: Look for GoMoon AI alerts about SALT cap or payroll tax. Enter DeFi names (AAVE, UNI, CRV) when volume and sentiment spike. Trail stop losses as TVL (total value locked) rises
D. Key Market Indicators to Watch When Trading Tax Policy
Knowing what to monitor outside of the headlines is essential. These indicators help validate trade setups triggered by tax policy news:
Treasury Yields: Rising yields = inflation risk from tax stimulus, Falling yields = market doubts tax policy will boost growth
Dollar Index (DXY): Strength = bullish reaction to growth tax cuts Weakness = fears of debt/deficit spiral
CPI, PCE, and GDP Data: Confirms whether tax policy is stimulating real growth or just adding debt
Fed Speeches and Minutes: The Fed may adjust its tone depending on the inflationary or disinflationary effects of the tax changes
Use Our AI-powered Economic Calendar Tool for Free Today
GoMoon transforms economic calendar data with AI-powered insights for smarter trading decisions. Our platform analyzes global events and rates their market impact on a scale of 1-10, helping you understand how they'll affect various assets. We've packed everything traders need: Live economic event streaming, custom notifications, and historical event replay with TradingView charts. What sets us apart is our comprehensive approach to event analysis.
Whether you're tracking the impact of major economic announcements or comparing forecast data with actual outcomes, GoMoon provides clear, actionable insights. You can personalize your calendar, stream live meetings directly on the platform, and analyze historical events like the dot-com bubble or COVID-19 crash to understand market reactions better. GoMoon clarifies the complex world of economic events for traders seeking data-driven decisions. Get started for free to get AI-powered economic insights today.
Related Reading
Canada Tariffs On US Goods
What Countries Have Tariffs Against The United States
Colombia Tariffs
Steel Tariffs