House Republicans released a sweeping 389-page tax bill that proposes $4 trillion in tax cuts while simultaneously raising the federal debt limit by the same amount.
The package includes a broad array of benefits, such as an expanded Child Tax Credit, a larger standard deduction, and temporary breaks on overtime pay, car loan interest, and tips—many set to expire after 2028.
While lawmakers failed to deliver on President Donald Trump’s promise to eliminate taxes on Social Security, they introduced a $4,000 deduction for seniors as a partial gesture.
A signature feature of the bill is the creation of “MAGA” savings accounts—formally “money accounts for growth and advancement”—targeted at children under eight. Under a pilot program, the government would contribute $1,000 to each account for children born between 2025 and 2028, with individuals allowed to deposit up to $5,000 annually. The accounts would be tax-exempt until the child turns 18.
In a nod to fiscal conservatives, the bill also attempts to offset some of the massive tax cuts by rolling back or capping select benefits. Colleges with large endowments would face increased taxes on investment earnings, corporations would lose some deductions for highly paid executives, and nonprofit foundations, undocumented immigrants, and professional sports franchises would see narrowed tax advantages.
A new 5% levy on remittances sent abroad is also introduced.
Republicans revived efforts to clamp down on the pandemic-era Employee Retention Credit program by proposing a ban on claims filed after January 31, 2024. The measure is among several aimed at curbing costs in the absence of deeper spending reductions.
Despite earlier discussions of introducing a millionaire tax bracket, the final bill steers clear of such measures. Instead, it caps state and local tax deductions at $15,000 for individuals and $30,000 for joint filers—but limits eligibility to those earning below $400,000 annually, a move likely to divide the GOP’s own ranks, especially among lawmakers from high-tax states.
Missing from the legislation is a formal cost estimate. Republicans initially sought $4.5 trillion in tax cuts, which would have required $2 trillion in spending reductions to remain within their budget framework. However, internal disagreements forced them to scale back to $4 trillion in cuts, paired with just $1.5 trillion in spending reductions, creating a fiscal gap that is only partially addressed in the bill.
“This bill delivers on what Americans voted for with President Trump’s promise to put America first—with tax policies that reward hard work, bring jobs back home, increase opportunity and rebuild the economy,” said House Ways and Means Chair Jason Smith.
The House committee is scheduled to begin formal consideration of the package on Tuesday, with Republican leadership aiming to pass it through the full chamber by Memorial Day and reach the Senate in time for a final vote by the July Fourth recess.
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