Late Friday evening, House Republicans released a portion of President Donald Trump’s tax agenda, bringing them one step closer to passing the commander-in-chief’s “big, beautiful bill.”
The legislation includes an increased child tax credit (CTC), a higher estate tax liability threshold – dubbed the “death tax” by Republicans – and a number of other provisions.
It also establishes the framework for making Trump’s 2017 Tax Cuts and Jobs Act (TCJA) permanent. Republican leaders had warned that failing to do so would result in a more than 20% tax increase for millions of Americans if the TCJA was allowed to expire at the end of the year.
So far, there is no mention of state and local tax (SALT) deduction caps in the bill, which have been a major point of contention between blue state Republicans who need to keep the House majority and GOP lawmakers from deep red, lower-tax states.
Another notable exclusion is a new tax bracket for millionaires.Trump had floated the idea of a small tax increase on the ultra-wealthy, and a source familiar with his thinking told Fox News Digital earlier this week that he was considering allowing a pre-TCJA 2.6% tax hike on people earning $2.5 million or more per year.
However, these and other measures may be included in the final bill.
The bill is also expected to include new Trump tax promises, such as eliminating taxes on tips, overtime wages, and Social Security checks for retirees.
Additional elements are expected to be added in the coming days through amendments. The entire bill is expected to pass the Ways & Means Committee, the House’s tax-writing panel, on Tuesday afternoon.
The release of the legislation is a significant step forward for House GOP leaders, who had been forced to postpone their original deadline of having a bill on Trump’s desk between Memorial Day and the Fourth of July.
However, the SALT deduction caps and the tax hike for millionaires are two of the most contentious issues.
House Republicans currently have a razor-thin three-vote margin, which means they can tolerate little dissent while still passing legislation without Democratic support.
They’re hoping to do just that, as almost no Democrats currently support Trump’s massive Republican policy overhaul.
Republican lawmakers are attempting to pass their legislation through the budget reconciliation process, which reduces the Senate’s passage threshold from 60 to 51 votes, aligning with the House’s own simple majority threshold.
Reconciliation allows the ruling party to effectively bypass the minority and pass broad legislation, as long as it addresses taxes, spending, or the national debt.
Trump wants Republicans to use the maneuver to address his top priorities, including border security, immigration, taxes, defense, energy, and debt ceiling increases.
Earlier this year, both the House and Senate passed frameworks that laid the groundwork for the legislation.
Now, the relevant committees of jurisdiction on either side must develop policy in accordance with that framework before all of the components are assembled into a final bill that must pass both houses of Congress before being signed into law by Trump.
The most recent portion released by the House Ways and Means Committee would raise the current maximum CTC from $2,000 to $2,500.
It would also increase the maximum deduction for qualified business income under 199A from 20% to 22%. This would primarily affect small business owners, whose entities are taxed at individual income tax rates.
The exemption level for the estate tax, which is levied on assets after a person’s death, is increased to $15 million from the current level of approximately $13.9 million.
Republicans have long criticized the estate tax as an unnecessary financial burden on grieving families, especially for small family-owned businesses. Supporters of the federal estate tax argue that it affects only a small number of estates.
“Seven years ago, the Trump tax cuts sparked an economic boom and brought much-needed relief to working families.” “Pro-family, pro-worker tax provisions are at the heart of President Trump’s economic agenda, which prioritizes working families over Washington and will create jobs, grow wages and investment, and usher in a new golden age of prosperity,” House Ways & Means Chairman Jason Smith, R-Mo., said in a statement on Friday night.
“Ways and Means Republicans have spent two years preparing for this moment, and we will deliver for the American people.”
