(ThyBlackMan.com) There is something we should understand when it comes to President Donald Trump’s tax policies based on his two previous tax cuts, they have not worked out to be in the best interest of working-class Americans, so far. Nevertheless, by advocating for a $2,000 consumer tax cut to boost the economy, which is completely opposite of his previous two tax cuts, which resulted in outsized benefits to billionaires, millionaires, and corporations, Mr. Trump is acknowledging, it is consumer spending that is at the heart of the United States economic growth, and Job creation.
If he felt that his economic policies of giving tax cuts to billionaires, millionaires, and corporations worked in making the United States the #1 and largest economy in the world, we would obviously be seeing another Trump tax cut proposal, benefitting that group. With unemployment rising in real-time, and the economy slowing, even after the Federal Reserve has made two interest rate cuts to support President Donald Trump’s fragile economy, Mr. Trump like presidents before him, who have found themselves in the situation, where their economic policies are failing, is turning to the reality and truth, it is consumer spending that creates Jobs, and expands the American economy; that consumer spending is 70% of GDP (gross domestic product).
So, what does that mean to you, consumer spending is 70% of GDP? What does that mean to you as an average person? Experts including the Federal Reserve chairman, Jerome Powell, state we have a $20 trillion, plus size economy. When you add up all the buying and selling transactions within our economy, it’s dominated by you, the consumer. 70% of all those $20 trillion plus economy transactions, when you add them up, are done by you, and me, and everyone else, as consumers. Those transactions could be buying and selling property, your home or real estate, buying or selling a car, washing machine, or dining out; whatever you engage in, when it comes to spending money. That makes up that $20 trillion plus economy. It is not the exportation of goods and services to other nations, and it is not the size of our military, although the United States spends more money, by far, on defense than any nation in the world, it is every day consumers spending money that makes the U.S. the greatest and the largest economy in the world.
Consumers spending money, you and me, and 347 million Americans, make up 70% of all those transactions. So, if the consumer stops spending money, our economy declines leading to layoffs. However, just the opposite is also true, when consumer spending increases, we get more Jobs, economic growth and yes, low unemployment rates. Consumer spending, or consumption spending, accounts for 68-70% of U.S. gross domestic product (GDP), according to the Bureau of Economic Analysis (BEA). Therefore, President Trump is saying he wants to increase consumer spending, by giving us a $2,000 tax cut, which will lead to Job creation and the expansion of the American economy.
However, before going any further, it is important to truly understand what a consumer tax cut is. Professional politicians, like President Donald Trump, tend to confuse voters about that matter. They call tax cuts to consumers, dividends, rebates, tax credits, and stimulus payments, or one-time payments to boost the economy. Here is the true definition of a Federal Government tax cut. If the money you receive increases your income, and you don’t have to pay taxes on it, or indicate it, as part of your gross income, when filing your taxes, “it is a tax cut.” So, what Mr. Trump is offering you, when he states he is giving you a “rebate,” or “dividend” is defined, as a tax cut. Your income is increased, and you are not paying any taxes on it.
Knowing, a “$2000 Direct Consumer Tax Cut” will create Jobs, as when you increase consumer spending, you increase Job creation which helps Mr. Trump’s sagging economy, why doesn’t he extend this tax cut to 10 years as he did with the One Big Beautiful Bill (OBBB) for millionaires, billionaires, and corporations? Consumption DATA shows, low-and middle-income Americans are more likely than wealthy earners to spend benefits, from the government immediately, and stimulate economic growth, creating millions of JOBS.
When you look at the cost of a $2000 Direct Consumer Tax Cut, this could be a problem for Trump and his administration. “Paying $2,000 to about 150 million adults earning $100,000 or less would require roughly $300 billion in revenue,” according to Erica York, vice president of federal tax policy at the Tax Foundation. So, a 10-year $2,000 Direct Consumer Tax Cut would cost, an estimated $3.0 trillion. However, that would be less than the $3.4 trillion cost of the OBBB, which did not achieve its objective of “a Blue-Collar Boom.”
Here is what was stated on the White House web site on June 24th, 2025, where the “One Big Beautiful Bill,” Trump’s tax cut proposal, was promoted: “The One Big Beautiful Bill delivers for the American worker: The One Big Beautiful Bill delivers the largest tax cut for working-and middle-class Americans in history. Put simply President Trump’s One Big Beautiful Bill will unleash our economy and deliver a Blue-Collar Boom.”
Nevertheless, President Donald Trump knows he needs a strong economy; one that addresses rising unemployment, inflation, and slow economic growth; an economy that will give him the time he needs to demonstrate his tariff policies are working. He also needs a strong U.S. economy to negotiate trade deals, when it comes to China. To achieve that, he needs to use common sense, as he is doing. Common sense suggest you turn to that which works, when it comes to Job creation and economic growth and that is consumer spending, because Consumer spending as has been stated is 70% of GDP.
Therefore, when you look at that 70% figure, and this is where facts, mathematics, and objectivity come into play regarding tax cuts; you want to know within that 70% group of spending consumers, who actually are the majority of spenders, within that group. Why is that important? It is important we know the core group within that 70%, because that is the group, who is primarily driving consumer spending.
And if that group is given a Consumer Tax Cut, that is the group of consumers who will generate a change reaction in spending that will spread through the economy, and create Jobs and economic growth. Why you might ask? It is simple – that is the group of consumers, in real-time, who is actually doing the greatest amount of spending, more than any other group, in the U.S. economy. It is their spending, that is “the big wheel” that is causing the little wheels, to turn.
So, who is that group of Consumers? The age group, beginning at 55 plus years are responsible for about 40% (almost half) of the spending done in our economy, and Baby Boomers are the core group of that 40% group of consumers. Thus, Baby Boomers ultimately are the core group of the 70% and are the largest homogenous population among that age group of consumers.
Therefore, there is a better way for Mr. Trump to deliver a tax cut to consumers, which will guarantee the delivery of the Blue-Collar Boom spoken of above, lifting his sagging economy, creating millions of Jobs, and addressing the issue of inflation, all at the same time. It is, through a Direct 10-year 10% $25,000 Boomer Consumer Tax Cut, the Trump administration can achieve their of objectives of growing Jobs and the economy. And the manner in which the tax cut is distributed in cooperation with the Federal Reserve will reduce inflation. Click on TheFixThisTime.com for more details.
A tax cut to Boomers does not mean you disregard other age groups in the nation’s pursuit of long term Job creation and economic growth. At the end of the Baby-Boomer tax cut cycle, the next generation of consumers in the age group from 55 years and up will be Generation X (1965-1980), who will be producing the most growth in spending, as they reach retirement. However, Generation X and American voters, at that time, will have to petition the current president and Congress to continue the tax cut cycle.
But it will be the evidence of the success of the first 10% Consumer Tax Cut under Mr. Trump’s administration, that will largely determine whether enhancing consumer spending through “a Direct Consumer Tax Cut model policy is sustainable.” However, there is no doubt the 10% Tax Cut will be sustained. Why? Because, it is mathematically and empirically sound.
Even a 5th grader can understand this, if you give a direct tax cut to the 70% (the consumer), who is powering your economy, you are going to get a burst of growth and Job creation through “NEW” SPENDING,” by the 70% (the consumer) who is powering, and growing your economy.
Staff Writer; James Davis
Mr. Davis is a Financial Analyst. His articles are about relating facts in a usable, truthful, and understandable way. That way, WE ALL WIN. James is, the author of three books, among them, “The Fix This Time,” Boost Your Retirement Income! Simultaneously Create Jobs and Spur Economic Growth (https://www.amazon.com/dp/B00MI3PD2M). Reach out to James @ his blog https://thefixthistime.com.
Question? Comment? One may use this email address; MrDavis@ThyBlackMan.com.
