In a significant move toward overhauling the U.S. tax code, House Republicans have introduced a major portion of former President Donald Trump’s latest tax agenda. This proposal lays the foundation for what Trump has often referred to as his “big, beautiful bill,” and marks a pivotal moment in advancing Republican fiscal priorities.
Highlights of the New Tax Proposal
The legislation contains several key elements designed to appeal to working families and business owners:
✔️ Expansion of the Child Tax Credit
One of the centerpiece features of the new plan is an increase in the Child Tax Credit (CTC), which would rise from the current $2,000 to $2,500 per child. This change is aimed at easing the financial burden on American families.
✔️ Increase in Estate Tax Threshold
The proposal also raises the threshold for estate tax liability—commonly known among conservatives as the “death tax.” This change would allow wealthier individuals to pass on more of their estates without triggering federal taxes.
✔️ Enhancing the 199A Deduction
Small business owners stand to benefit from an increase in the qualified business income deduction under Section 199A. The maximum deduction would jump from 20% to 22%, a shift that could provide substantial relief for entrepreneurs and pass-through businesses.
Making the 2017 Tax Cuts Permanent
A major goal of this proposal is to cement the 2017 Tax Cuts and Jobs Act (TCJA) into law permanently. Without legislative action, those tax breaks are set to expire at the end of this year, potentially triggering a tax hike of over 20% for millions of Americans. Making the TCJA permanent is a top Republican priority and a key part of Trump’s tax vision.
Trump tax plan 2025 is a central component in the discussion around making these tax cuts permanent, ensuring long-term relief for American taxpayers.
Ongoing Debates and Missing Pieces
Despite the progress, several contentious issues remain unresolved:
- SALT Deduction Caps: The new proposal currently omits any changes to the state and local tax (SALT) deduction caps, a major sticking point for Republicans from high-tax states like New York and California.
- Millionaire’s Tax Bracket: Another notable absence is a new tax bracket targeting high earners. Trump had previously floated the idea of a modest increase for individuals earning $2.5 million or more annually, but that measure has yet to appear in this version of the bill.
While these elements are not part of the initial release, they could still be added through future amendments.
New Tax Breaks Under Consideration
Sources close to Trump suggest that additional pledges may be included in the final bill. These potential additions could involve:
- Eliminating taxes on tips and overtime wages
- Ending federal taxes on Social Security payments for retirees
Such measures would align with Trump’s ongoing efforts to simplify the tax code and reduce burdens on working-class Americans.
As the debate evolves, Trump tax plan 2025 continues to shape how lawmakers prioritize various elements of the reform plan.
Legislative Path and Political Strategy
The House Ways & Means Committee is expected to begin reviewing the full legislation next week. The bill’s release signals notable progress after earlier delays pushed back Republican leaders’ initial timeline, which aimed to have the legislation on Trump’s desk between Memorial Day and July 4th.
However, the Republican majority in the House remains slim. With only a three-vote margin, party leaders must minimize internal dissent to pass the bill without relying on Democratic support.
To bypass the 60-vote threshold usually required in the Senate, Republicans are planning to use the budget reconciliation process, which would allow them to pass the measure with just 51 votes. This procedural strategy is a critical component of their plan to enact sweeping policy changes.
What Comes Next?
Earlier this year, both chambers of Congress passed budget frameworks setting the stage for this legislation. Committees in both the House and Senate are now tasked with aligning policy details with that framework. Once finalized, the bill must once again pass through both chambers before being sent to Trump for his signature.