Catenaa, Tuesday, May 13, 2025- GOP unveiled its draft tax bill on Monday, which seeks to end green energy tax breaks and eliminate taxes on tips, overtime pay and Social Security benefits.
The text released by the House Ways and Means Committee on Monday details how Republicans are trying to fulfil Trump’s campaign-trail promises and shows where they want to raise taxes to cover part of the cost.
Monday’s bill contains a $30,000 cap on State and Local Taxes (SALT) that starts shrinking when income reaches $400,000, and several members continue threatening to withhold their votes.
The GOP tax plan, broadly, would extend the Trump tax cuts beyond their scheduled Dec. 31 expiration date, preventing tax increases and adding some new ideas.
The proposal continues tax breaks for high-income households and estates, but it is also designed to provide benefits for middle-income households. The plan would temporarily boost the standard deduction and child tax credit while also expanding tax cuts for estates and owners of closely held businesses.
The top tax rate would remain 37%, after Trump flirted with a higher level for millionaires.
An initial version released Friday would reduce federal revenue by $4.9 trillion, compared with doing nothing. Republicans were aiming to hit a target of no more than $4 trillion to $4.5 trillion.
Meanwhile, Tax credits for producing components for batteries and renewable energy would generally expire after 2031, with expiration after 2027 for wind-energy components.
Tax breaks for tips and overtime pay would start in 2025 and expire after 2028. The tips break is written so that it may be claimed by people who work as independent contractors, such as Uber drivers.
People aged 65 and older would get an additional $4,000 standard deduction, on top of the existing standard deduction, the existing bonus deduction for seniors and the temporary bonus for all taxpayers.
This would last from 2025 through 2028 and start phasing out once income reaches $75,000 for individuals and $150,000 for married couples.
