House Republicans released a portion of President Donald Trump’s tax agenda late on Friday evening, bringing them one step closer to completing the commander-in-chief’s “big, beautiful bill.”
The legislation includes an increased child tax credit (CTC), a higher threshold for estate tax liability – what Republicans have referred to as the “death tax” – and several other measures.
It also lays the groundwork for making Trump’s 2017 Tax Cuts and Jobs Act (TCJA) permanent. Republican leaders had warned that failing to do so would lead to a tax increase of over 20% for millions of Americans, if TCJA were allowed to expire at the end of this year.
There is no information in the bill so far about state and local tax (SALT) deduction caps, which have been a significant point of contention between blue state Republicans critical to keeping the House majority, and GOP lawmakers from deeper red, lower-tax states.
Another notable exclusion is a new millionaires’ tax bracket. 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 Trump was considering allowing a pre-TCJA 2.6% tax hike on people making $2.5 million per year or more.
Those measures and others are not necessarily excluded from the final bill, however. The legislation is also expected to include new Trump tax pledges like eliminating taxes on tips, overtime wages and Social Security checks for retirees. More elements are expected to be added in the coming days via amendments. The full legislation is expected to advance through the Ways & Means Committee, the House’s tax-writing panel, on Tuesday afternoon.
Release of the legislation is a major sign of progress for House GOP leaders, who had been forced to punt their initial planned deadline of having a bill on Trump’s desk by sometime between Memorial Day and the Fourth of July. But SALT deduction caps and a millionaire’s tax hike are two of the most volatile discussion points.
House Republicans currently have a razor-thin three-vote margin, meaning they can afford to have little dissent and still pass anything without Democratic support. They’re hoping to do just that, with virtually no Democrats currently on board with Trump’s massive Republican policy overhaul.
Republican lawmakers are working to pass their legislation via the budget-reconciliation process, which lowers the Senate’s passage threshold from 60 votes to 51, lining up the House’s own simple majority threshold. Reconciliation allows the party in power to effectively skirt the minority and pass broad pieces of legislation – provided they address taxes, spending or the national debt.
Trump wants Republicans to use the maneuver to tackle his priorities on the border, immigration, taxes, defense, energy, and raising the debt ceiling. Both the House and Senate passed frameworks setting the stage for the bill earlier this year.
Now, the relevant committees of jurisdiction on either side must craft policy in line with that framework, before all the parts are fitted into a final bill that must again pass both houses of Congress before being signed into law by Trump.
The most recent portion released by the House Ways & Means Committee would increase the current maximum CTC from $2,000 to $2,500. It would also boost the maximum deduction for qualified business income, a tax provision known as 199A, from 20% to 22%. That would largely affect small business owners whose entities are taxed under individual income tax rates.
On the estate tax, which is levied on assets after person’s death, it raises the exemption level to $15 million from the current level of roughly $13.9 million. Republicans have long criticized the estate tax as a needless financial burden on grieving families, particularly hitting small family-owned businesses. Supporters of the federal estate tax point out that it affects a relatively small number of estates.
“Seven years ago, the Trump tax cuts sparked an economic boom and provided needed relief to working families. Pro-family, pro-worker tax provisions are the heart of President Trump’s economic agenda that puts working families ahead of Washington and will create jobs, grow wages and investment and help 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.”
