House Republicans released a sweeping tax bill aligned with President Trump’s economic agenda, proposing $4 trillion in cuts and major policy changes affecting families, seniors, and businesses.

By yourNEWS Media Newsroom

Republicans in the House of Representatives released their long-anticipated tax legislation on May 12, outlining a multi-trillion-dollar plan that forms a central pillar of President Donald Trump’s 2025 economic agenda. The 389-page proposal includes over $4 trillion in tax reductions, $1.5 trillion in spending cuts, and a $4 trillion increase to the federal borrowing cap. Among its headline provisions: permanent extension of the 2017 tax cuts, elimination of taxes on tips and overtime, and the creation of new MAGA savings accounts.

The package, described by President Trump as “the one big beautiful bill,” was introduced by the House Ways and Means Committee. “Ways and Means Republicans have spent two years preparing for this moment, and we will deliver for the American people,” said committee chair Rep. Jason Smith (R-Mo.). “Pro-family, pro-worker tax provisions are the heart of President Trump’s economic agenda.”

One major provision makes permanent the individual tax rates established by the 2017 Tax Cuts and Jobs Act. While Trump and Speaker Mike Johnson (R-La.) had floated targeted increases for the ultra-wealthy, the bill retains the current 37% top rate and does not introduce a millionaire’s tax.

The plan boosts the Qualified Business Income deduction for pass-through entities from 20% to 22% and increases the estate and gift tax exemption to $15 million, with future adjustments for inflation.

Treasury Secretary Scott Bessent testified in support of the proposal at a recent hearing. “The 2017 Tax Cuts and Jobs Act provided a substantial, non-inflationary impetus to the economy, which resulted in real wage gains on a non-inflationary basis for the American people and a robust economy,” he said.

Tax analysts warn that allowing the 2017 tax cuts to expire would increase taxes on nearly two-thirds of Americans beginning in 2026. “If Congress does nothing, most Americans will face higher taxes, worse incentives for work and investment, and a more complicated tax system,” noted the Tax Foundation in a March 2024 report.

Additional family-focused measures include a temporary $500 increase to the Child Tax Credit and a $2,000 boost to the standard deduction for couples, raising it to $32,000. These changes could take effect this year and impact 2025 tax filings.

The bill also creates incentives for businesses to offer paid family and medical leave and offers seniors $4,000 in new “enhanced deductions.” While it stops short of fulfilling President Trump’s campaign promise to end taxes on Social Security benefits, Rep. Thomas Massie (R-Ky.) has introduced a separate measure to do so.

The GOP bill includes several of Trump’s signature tax pledges, such as exempting tips, overtime, and car loan interest payments from federal taxation—though these provisions are set to expire in 2028. A new feature, MAGA (Money Account for Growth and Advancement) accounts, will launch as a pilot savings program with an initial $1,000 tax-preferred deposit.

In higher education policy, the bill targets university endowments, proposing a 21% surtax on institutions like Harvard. Education Secretary Linda McMahon recently criticized the Ivy League’s $53 billion endowment. “If Harvard prefers not to change, then Harvard should have no problem using its overflowing endowment to fund its bloated bureaucracy,” McMahon stated.

To address longstanding concerns among lawmakers from high-tax states, the bill raises the state and local tax (SALT) deduction cap to $30,000 for couples earning under $400,000—up from the current $10,000 cap.

The House Ways and Means Committee will begin marking up the legislation on May 13. Treasury Secretary Bessent, speaking to Bloomberg on May 12, said the process was ahead of schedule. “The tax bill is moving along very well, better than I could have imagined,” he said, projecting that the full economic agenda—trade, tax, and regulation—will be completed by year’s end.

With Republican control of both chambers of Congress and the White House, the legislation is expected to advance via budget reconciliation, bypassing the Senate filibuster and requiring only a simple majority.

White House press secretary Karoline Leavitt emphasized the stakes during a May 9 briefing. “Anyone who opposes this bill will be opposing the largest tax cut in American history,” she said.

The legislation arrives on the heels of a strong fiscal report. In April, the federal government posted a $258 billion surplus, a 23% year-over-year increase, according to the Monthly Treasury Statement. Higher import duties and tax receipts helped drive the improved budget outlook, despite a 5% increase in federal outlays.

Primary spending in April included Social Security ($132 billion), net interest ($89 billion), Medicare ($82 billion), and healthcare ($76 billion). Treasury has warned Congress that extraordinary measures to finance the government will be exhausted by August or September if no action is taken on the debt ceiling.