House Republicans are moving headlong with President Donald Trump’s economic stimulus package. That’s right, this proposed plan includes big tax breaks that add up to trillions of dollars in the red. The bill as proposed would provide long-overdue relief to families and workers while rewarding investment right here in America.
Their proposed legislation would raise the State and Local Tax (SALT) cap. Currently, taxpayers making a modified adjusted gross income of $400,000 or less are subject to this cap which is set at $30,000. This change has received quite a bit of attention, unlike President Trump’s recent full-throated support for raising the SALT cap. This move would be positive. Rep. Mike Lawler said passing this provision is crucial to giving more middle-income families tax relief.
House Ways and Means Committee Chairman Jason Smith, R-Mo., expressed his commitment to the process, stating that he will “continue to work closely with President Trump and our House colleagues to get the One, Big, Beautiful Bill that delivers on the President’s agenda to his desk as soon as possible.”
The legislation would extend the maximum child tax credit. This expansion is one of the few positive features of the Tax Cuts and Jobs Act (TCJA). It maintains the existing credit of $2,000 for each child. It increases this figure to $2,500 per child (fully refundable and advanceable) through 2028. The absence of millions of children from these benefits raises alarm bells. Kris Cox, director of federal tax policy at the Center on Budget and Policy Priorities, remarked that the proposal “did nothing for the 17 million children that are left out of the current $2,000 credit.”
Beyond these measures, the House Ways and Means bill seeks to deliver additional targeted relief directly to workers. If passed, it would repeal taxes on tips and provide for tax-free overtime pay. Garrett Watson, the Tax Foundation’s director of policy analysis, noted that many tax filers would gain significant and positive impacts under these proposed changes. Still, he pointed out that many wouldn’t be able to share in the benefits. “Tax filers with no other income sources outside of Social Security would typically see little benefit,” he stated.
House Republicans stand willing to address these and other challenges during the developing legislative process. From climate to community engagement, they will negotiate changes over numerous provisions of the bill. The final result will determine whether the relief goes to regular taxpayers or to helping stabilize the economy in the long run.