The $T1$-Billion Tax Cut Proposed by the G.O.P. and the Case for a Higher Deduction

There are other spending cuts Republicans are going to make to pay for the legislation. More than eight million low-income Americans could lose their health insurance as a result of the Medicaid cuts that the G.O.P. has drafted, for example. All while the biggest benefits of the tax cuts would flow to high-income Americans who owe the most in income tax, according to an analysis by the Center on Budget and Policy Priorities, a liberal think tank.

The bill’s higher deduction is advocated by Rep. Nick LaLota of New York. He told reporters last week that discussions have “a lot more to go now,” but ultimately he thinks Republicans will reach a deal. The issue is a red line for him and four other colleagues. With the Republicans in control of the House, their opposition could kill the bill.

The fight over SALT is expected to be a major sticking point when the Ways and Means committee begins its markup of the bill on Tuesday. The cap was proposed to be lifted to $30,000. However, a handful of GOP lawmakers representing districts in states like New York, New Jersey and California with high local property taxes are leading the push for a higher cap. The number north of $30,000 is what they insist the bill must include.

The 2017 tax bill capped the amount that taxpayers in several (mostly blue states) can deduct for state and local taxes at $10,000 per year. During his 2024 reelection campaign, Trump vowed to get rid of the cap, but doing so would add significant costs to the GOP package and most Senate Republicans don’t support scrapping the cap.

The GOP can’t get rid of the TINY change: Implications for the Medicaid expansion and other tax-exempt trusts

The plan released by the Ways and Means committee would also establish a new type of trust called a “MAGA account,” which stands for “money account for growth and advancement.” Based on the text of the bill, it appears to be a tax-exempt trust created by the federal government for younger Americans. Up to $5,000 can go into the accounts annually and beneficiaries can use the funds to pay for higher education, a small business and their first home. It terminates when the beneficiary turns 31.

There are no new income taxes on high earners in the plan. President Trump had floated allowing the tax bracket for high earners — those making between $2.4 million and $5 million — to go from 37% to 39.6%. But on Friday he pulled back from that, writing on social media that although he backed the “TINY” change, Democrats would use it as a campaign issue against Republicans. I’m ok if Republicans do it, but they should probably not. Trump said.

The GOP wants to make the tax cuts permanent at the end of the century. The new tax breaks were added to the plan by the House Committee on Ways and Means. But if Republicans can’t hit $1.5 trillion in spending cuts to offset the costs of tax cuts, they will be forced to scale back their ambitions.

Missing from the committee’s proposal are drastic changes to how the government pays for the Medicaid expansion that increased eligibility for lower-income childless, working-age adults as part of the Affordable Care Act. Conservative hardliners had pushed for a decrease in federal contributions to states with this expanded coverage. The plan also does not include the per person cap on federal spending that some lawmakers had called for.

The work requirements will be for “able- bodied” adults who get benefits and have to work at least 80 hours a month. They also outlined changes to parts of the enrollment process and placed restrictions on states’ ability to raise taxes on healthcare providers, a practice that in turn attracts more federal matching dollars. The bill also references an overarching goal of eliminating “waste, fraud and abuse” within the program.

Source: Republicans face a crucial stretch this week as they aim to deliver on Trump’s agenda

Getting the Gimmes Out Of The Senate: Repackaging the House Budget, Health Care and Safety Net Programs With a Major Reshuffle

Republicans are trying to sort out the most contentious policies in the next few days and that time frame will be tested. Some of the key sticking points are presented here.

The House Republicans are hoping to finish the details of the “big beautiful bill” by the end of the month. House Speaker Mike Johnson, R-La., has already muscled a budget blueprint for the plan through the chamber. Three House committees are working to define policies that will have a far-reaching impact on people’s pocketbooks and healthcare, posing a much more difficult task this week.

Two competing camps are inside his conference. Republicans in the swing district are worried dramatic cuts to safety net programs and popular tax incentives could affect their reelection prospects. More conservative members are arguing voters put a GOP trifecta in place to slash the deficit and restructure government programs.

The Tax Foundation and the CPV, which is expected to be implemented by the House and Senate Majority Leaders in 20 plus Issues

The fiscal cost of the legislation is still up in the air as Republicans are haggling over spending cuts Just the tax provisions are, so far, expected to cost roughly $3.8 trillion. But that is most likely an undercount. The Republican Party set a time frame for evaluating the cost of the legislation. The cost of the tax changes taking effect in a year’s time is only $9 trillion.

Last week, Texas Republican Chip Roy told reporters there were still roughly “20 plus issues” that need to be resolved. Johnson wants to get the bill through the House and to the Senate by Memorial Day, with the goal of having it to President Trump for his signature by July 4.

But the real deadline for Republicans is mid-July. That’s when Treasury Secretary Scott Bessent says Congress needs to increase the country’s borrowing authority to avoid a potentially catastrophic government default. GOP leaders plan to increase the debt ceiling for five years in this package.

The fleeting nature of those incentives will make them meaningless for companies who have been caught up in uncertainty due to the uncertainty created by Mr. Trump. The Tax Foundation estimated that the bill would increase the GDP by less than one percent in the long term, compared to the 1.7 percent growth the group attributed to the original law.

There would be a cost to that modest growth. The tax bill includes new limits on qualifying for the child tax credit, including that a child whose parent lacks a Social Security number cannot receive the benefit. That would be a change from how the credit works now, when parents without Social Security numbers, a group that includes undocumented migrants, can claim the money as long as their child is a citizen. 2 million children would lose the benefit if rules are tighter, the chief of staff of the Joint Committee on Taxation told lawmakers.

Lattice Masses for the Peasant and the Rich: A Democrat Attempt to Stop the Boundary Problem

“‘Let’s get a loaf of bread to the peasant and a huge benefit to the wealthy’; that’s what they’re doing,” said Representative Donald S. Beyer Jr., a Virginia Democrat.