House Republicans on Monday released a sweeping 389-page tax plan at the core of President Donald Trump's domestic agenda, proposing roughly $4 trillion in tax cuts alongside a $4 trillion debt ceiling hike, as lawmakers move swiftly to pass the legislation before the July 4th recess.
The legislation, formally titled "The One, Big, Beautiful Bill," revives many provisions from Trump's 2017 tax law and adds new campaign promises including the elimination of federal taxes on tips, overtime pay, and car loan interest through 2028. A new MAGA savings account for children, short for "money account for growth and advancement," was also introduced.
"This bill is more than policy-it's a path to growth," Jay Timmons, CEO of the National Association of Manufacturers, said in support of the measure's increased 23% passthrough deduction, up from 20%. "It means the ability to buy equipment, hire workers, increase pay and expand operations with greater certainty and confidence."
But the bill has exposed internal Republican tensions, particularly around state and local tax (SALT) deductions. The legislation raises the SALT deduction cap from $10,000 to $30,000 for filers earning $400,000 or less. That falls far short of demands from GOP lawmakers in high-tax states like New York and New Jersey, who have pushed for caps as high as $62,000 for single filers and $124,000 for joint filers.
"Still a hell no," Rep. Nick LaLota (R., N.Y.) said in response to the proposed cap.
The bill also targets policies backed by Democrats, including eliminating key renewable energy subsidies enacted in the 2022 Inflation Reduction Act. These include rescinding funds for the Department of Energy's low-carbon tech loan program and grants supporting emissions reduction in disadvantaged communities. Several Environmental Protection Agency initiatives, including a $20 billion climate financing program, would also face clawbacks.
Colleges and private foundations would face increased taxes under the bill, which also tightens rules for undocumented immigrants seeking tax benefits and limits deductions for professional sports franchises and corporate executive compensation.
Despite these offsets, a cost estimate has not been released. Previous drafts projected $5 trillion in gross tax cuts, exceeding GOP budget targets. Lawmakers are now aiming for $4 trillion in cuts, paired with $1.5 trillion in spending reductions to stay within reconciliation limits.
The proposal expands the Child Tax Credit to $2,500 through 2028 and preserves the 2017 individual income tax rate brackets, rebuffing earlier discussions of allowing the top 37% rate to expire.
Social Security tax exemptions, a Trump campaign promise, were dropped due to Senate rules. Instead, seniors would receive a larger special deduction.
House Speaker Mike Johnson (R., La.) said he remains confident in advancing the full package-including tax, border, defense, and energy policies-by Memorial Day. "Yes, I think we're going to meet it," Johnson told reporters.
The Ways and Means Committee is set to begin formal consideration of the tax section on Tuesday afternoon, with lawmakers warning the markup could extend into the night. Blue-state moderates are expected to continue pressing for higher SALT caps, while Senate Republicans prepare their own adjustments.
Critics argue the plan primarily benefits corporations and the wealthy. "So far this costly bill appears to double down on trickle down, with huge tax cuts that will further enrich the rich and not much for the rest of us," Amy Hanauer, director of the Institute on Taxation and Economic Policy, said in a statement.
