Does Bessent Signal Tax Reform for the Wealthy?

Scott Bessent’s recent mic-drop moment, “Everything’s on the table", has Washington and Wall Street buzzing. As Trump’s Treasury Secretary, Bessent is driving a bold agenda to fund fresh rounds of tax cuts, potentially by raising taxes on America’s wealthiest. But it’s not just about higher brackets or capital gains, we’re talking spicy stuff like nixing taxes on tips and overtime, boosting Social Security perks, and letting you deduct your car loan interest. On the surface, these moves sound like middle-class wins. But when you dig deeper, it’s clear there’s a bigger play in motion. Let’s break it all down, what’s in place now, what’s being proposed, and who wins or loses in this tax shake-up.

No Taxes on Tips and Overtime?

Right now, if you’re a tipped worker—think servers, bartenders, delivery drivers, or an hourly worker putting in overtime, your extra earnings are taxed like regular income. No breaks. You hustle harder and still hand a chunk over to Uncle Sam. So that waitress is working a double to cover rent? She’s taxed on every penny of that tip jar. The nurse is clocking 60 hours? Still taxed at the same rate.

Proposed Shift:

Under proposals supported by Bessent and floated during the 2024 presidential campaign (yes, both Trump and Kamala Harris backed it), tips and overtime could become completely tax-free. Alabama started the trend back in 2023, and several states, like North Carolina and Kentucky, are looking to follow suit in 2026. But is this just a feel-good policy with a hidden twist? “It sounds like a win for workers, but it creates unfair tax gaps,” argue policy analysts at the Tax Foundation. Two people earning $30K could owe vastly different taxes, just based on how they’re paid. Plus, there’s the ‘dynastic wealth’ warning. NYU’s Scott Galloway says untaxed income funneled into trusts could just supercharge inherited wealth, not working-class relief.

Social Security Boosts

More than 72.5 million Americans receive Social Security or SSI. These benefits see up to 85% taxed, depending on other income. In 2025, recipients are getting a 2.5% COLA (Cost-of-Living Adjustment), nice, but barely enough to keep up with rising grocery bills and rent. Plus, there’s a looming trust fund shortfall. The SSA projects that without reform, benefits will be cut to 83% by 2035, or even sooner if public pension adjustments accelerate.

Proposed Shift:

Bessent wants to eliminate or reduce taxes on Social Security payments, offering relief to retirees and bolstering disposable income for millions. “We’ve got broad agreement and we’re going to go from there,” the Treasury Secretary said from Buenos Aires, signaling a serious push to include these perks in Trump’s expanded tax reform bill. Sounds golden, right? But experts like Kathleen Romig caution: richer retirees with large portfolios stand to gain the most, while low-income seniors may barely notice a difference, especially if service disruptions and office closures continue at SSA. And with 7,000 job cuts and six regional offices closed, some fear benefit delays, or tech glitches could derail even the best-intended reform.

Auto Loan Interest Deductions

As of now, you can only deduct auto loan interest if you're self-employed and using the car exclusively or partly for business. And even then, you need detailed logs, mileage records, and receipts. Standard mileage rate in 2025? 70 cents per mile, but you lose the right to deduct interest unless you use the actual expense method. In short, deductions are limited and complicated.

Proposed Shift:

The USA CAR Act (a Trump-favored proposal) would make car loan interest tax-deductible on vehicles assembled in the U.S. Buy American, save more—that’s the pitch. It’s also intended to rev up domestic auto sales. “This will stimulate massive domestic auto production and make car ownership dramatically more affordable,” Trump said in 2024 at the Detroit Economic Club. Cool incentive, right? But critics say it favors those who can afford newer, pricier U.S.-made cars, leaving lower-income drivers in the dust. And yes, you’ll still need receipts, logs, and mileage records to make the deduction work.

Millionaire Tax Bracket

While much of the spotlight is on tax breaks for tipped workers, retirees, and small business owners, there’s a less publicized but equally significant move brewing. Bloomberg recently reported that Republicans are weighing the creation of a new tax bracket for individuals earning $1 million or more. That’s a noticeable shift in tone, especially from a party historically focused on across-the-board tax cuts. Bessent’s “everything’s on the table” remark seems to cover both ends of the income spectrum, relief for workers, and higher contributions from ultra-high earners. If passed, this new bracket could bring meaningful revenue to offset expanded Trump-era cuts, while also signaling a pivot in GOP tax strategy—from blanket cuts to more targeted reforms that ask the wealthiest Americans to chip in a bit more.

If We Want to Fix the System

If the real goal is reducing wealth inequality, these proposals are a start, but not the endgame. Experts from both the Cato Institute and Mercatus Center argue that structural reforms like:

• Capital gains tax tweaks
• Raising corporate rates
• Minimum wage hikes
• Broad-based standard deduction increases

…are where real change lives. “Current erratic actions have the potential to undermine much more important reforms,” says Romina Boccia of Cato.

Final Thought

Bessent’s “everything’s on the table” sounds bold, but if the fine print favors the wealthy, it’s just silverware dressed up as reform. These proposals may offer short-term wins, but without thoughtful execution, they risk deepening inequality and distracting from real solutions. What we need isn’t just flashy tax perks, it’s a fairer system that works for everyone, not just those already at the top. If a full-course fix is what’s promised, let’s make sure everyone gets a seat at the table. Subscribe to our newsletter for more no-fluff breakdowns of tax policy, financial moves, and the latest from D.C. that could hit your wallet.