The latest analysis of the House Republican tax package has revealed a staggering price tag. The Joint Committee on Taxation now estimates that the plan will cost $3.7 trillion over the next decade, reshaping federal revenue and deficit projections. While the bill extends many of the tax cuts from Trump’s 2017 Tax Cuts and Jobs Act, it also introduces new provisions aimed at individuals rather than corporations.
The tax plan makes permanent the lower individual income tax rates, ensuring that brackets remain at 10, 12, 22, 24, 32, 35, and 37 percent beyond 2025. The standard deduction, which was doubled under the 2017 law, will also be locked in, adding $1.3 trillion to the deficit.
The biggest winners in this package are middle-class workers. The bill includes a new deduction for overtime pay, costing $124 billion over four years. A similar tax break for tips will run $40 billion during that period. Seniors will also see benefits, with an expanded deduction worth $71 billion, allowing those over 65 to claim an additional $4,000 in tax relief.
The child tax credit remains a major component, with an expansion costing nearly $800 billion. Meanwhile, a new deduction for car loan interest will cost $58 billion, providing relief for vehicle owners.
Republicans are balancing these cuts with spending reductions. The plan includes $1.5 trillion in budget cuts, targeting green energy incentives and international tax enforcement. Scaling back Biden-era renewable energy credits is expected to generate more than $500 billion in savings.
The bill is still under review, with lawmakers debating adjustments to the state and local tax (SALT) deduction cap. Some Republicans want to raise the cap to $30,000, but others argue that it does not go far enough.
The tax package is a defining moment for fiscal policy. While it delivers relief to workers and families, it also raises concerns about long-term deficit impacts.
Sources:
https://thehill.com/business/budget/5297588-republicans-tax-bill-jct/