GOP Tax Bill

[Fernando]

GOP Tax Bill Seeks to Put Cash in Taxpayers’ Pockets in Early 2026​

The first public version of Republicans’ long-awaited tax bill aims to put more money in Americans’ pockets quickly in early 2026, extending President Trump’s expiring tax cuts and adding some new twists that would boost many tax refunds next year and increase take-home pay.

The bill released late Friday would increase the standard deduction by $1,000 for individuals and $2,000 for married couples starting in tax year 2025, above and beyond the Trump tax cuts’ expansion of that basic level where income taxes don’t apply. The standard deduction is currently $15,000 for individuals and $30,000 for married couples.

The maximum child tax credit would increase to $2,500 from $2,000, also starting this year. Those changes would mean that many taxpayers who don’t change their withholding would see larger-than-expected refunds in spring 2026. For a middle-income married couple with two children in the 12% tax bracket, that means a $1,240 tax cut for tax year 2025.

The legislation is incomplete and will likely be changed substantially before the committee vote. It is silent on some of the issues that are dividing Republicans, including the cap on the state and local tax deduction and the fate of clean-energy tax credits that Democrats created in 2022. It doesn’t include the tax-rate increase for the highest-earning Americans that Trump has been floating in recent days.

The bill also includes few of the potential tax increases that Republicans have been considering, and has no mention of such ideas as higher taxes on university endowments, limits on deductions for executive pay and caps on businesses’ ability to deduct state and local taxes. It doesn’t yet include versions of Trump’s desired proposals, such as faster write-offs for factory construction projects and removing taxes on tips, overtime pay and Social Security benefits.

The bill does include a permanent extension of higher estate-tax exemptions, setting that at $15 million per person in 2026 and indexing it to inflation. It would also permanently extend the deduction for certain closely held businesses that pay taxes through their owners’ individual returns, boosting that break to 22% from 20%. It also changes rules in ways that help some high-income service-industry businesses such as medical and dental practices.

The top tax rate on that income from closely held businesses would drop to 28.9% from 29.6%. Multinational companies would avert tax increases on certain foreign profits and some income from U.S. exports.

The plan also retains some key limits on deductions that Congress created in 2017, such as a rule that caps at $750,000 the amount of mortgage debt that can generate deductible interest. It would permanently repeal miscellaneous itemized deductions, such as legal fees and unreimbursed business expenses. Moving expenses in most cases would remain nondeductible.

 

[Fernando]

I don't see the bill in stimulating real estate market.
I was hoping for accelerated depreciation in buying real estate.
The $750,000 cap on mortgage deduction didn't help Not much help in Bay Area where most homes sell over million dollars.
And with Trump's inflationary tariffs, Powell won't be able to help lower mortgage rates this year. Thanks Trump.

 

[Fernando]

MSN

House GOP reveals Trump's tax breaks for tips, overtime and car loans, but costs run high​

House Republicans proposed sweeping tax breaks Monday in President Donald Trump's big priority bill, tallying at least $4.9 trillion in costs so far, partly paid for with cuts to Medicaid, food stamps and green energy programs used by millions of Americans.

There's also a tripling of the state and local tax deduction, called SALT, from $10,000 up to $30,000 for couples, which certain high-tax state GOP lawmakers from New York and California already rejected as too meager. Private universities would be hit with hefty a new tax on their endowments, as much as 21%, as the Trump administration goes after the Ivy League and other campuses. And one unusual provision would terminate the tax-exempt status of groups the State Department says support “terrorists,” which civil society advocates warn is a way to potentially punish those at odds with the Trump administration.

s for the president's promises, the legislation includes Trump's “no taxes on tips” pledge, providing a deduction for those workers in service industry and other jobs that have traditionally relied on tips. It directs the Treasury secretary to issue guidance to avoid businesses gaming the system.


The package also provides tax relief for automobile shoppers with a temporary deduction of up to $10,000 on car loan interest, applying the benefit only for those vehicles where the final assembly occurred in the United States. The tax break would expire at the end of Trump’s term.

For seniors, there would be a bolstered $4,000 deduction on Social Security wages for those with adjusted incomes no higher than $75,000 for individuals and $150,000 for couples.

But one hard-fought provision, the deduction for state and local taxes known as SALT, appears to be a work in progress. The legislation proposes lifting the cap to $15,000 for single filers and $30,000 for couples, but with a reduction at higher incomes — about $200,000 for singles and $400,000 for couples.

 

[Fernando]

It's not major tax reform. It looks more like Trump Tax Reform 1.1

I don't see significant help for business to spur our economy. I'm a true Republican and always want tax incentives to encourage businesses toward government objectives.
I don't see any increase benefits to the real estate market. At least increase the $750,000 mortgage cap to $1,000,000.

The tax bill encourages Americans to work for tips and overtime. Yes, American children become waiters and uber drivers. Enjoy your tips.
Reagan would be ashamed of this bill.

 

[Fernando]

https://www.marketwatch.com/story/under-new-gop-bill-multimillionaires-could-dodge-the-39-6-tax-rate-floated-by-trump-4cb12c07

Under new GOP bill, multimillionaires could dodge the 39.6% tax rate floated by Trump​

The multimillionaires who were in President Donald Trump’s sights for a possible tax hike can breathe a little easier. A high-end income-tax rate of 39.6% for multimillionaires didn’t make the cut — so far — in a tax bill coming together in the U.S. House of Representatives.

There are a wide range of tax changes that could impact millions of people under the bill. But eligibility has a lot of caveats. For example, the SALT deduction applies to couples with $400,000 or less.

“There are caps, limits, phase-ins and phase-outs on practically everything,” Gleckman said. “It’s a whole set of timing games at play to make the numbers work.”

I HATE THESE CAPS, LIMITS, PHASE-INS AND PHASE-OUTS.

 

[Fernando]

Trump’s ‘One Big Beautiful’ budget bill falls short in key vote

President Donald Trump’s sprawling budget plan failed a key test Friday when the Republican-controlled House budget committee rejected the blueprint for now as thorny issues like Medicaid cuts and deducting state and local taxes or SALT remain unresolved. With a handful of Republican hard-liners...

www.yahoo.com

Trump’s ‘One Big Beautiful’ budget bill falls short in key vote​

President Donald Trump’s sprawling budget plan failed a key test Friday when the Republican-controlled House budget committee rejected the blueprint for now as thorny issues like Medicaid cuts and deducting state and local taxes or SALT remain unresolved.

With a handful of Republican hard-liners voting against the bill, the panel voted 21-16 against the complicated measure of deep tax and spending cuts dubbed the “One Big Beautiful Bill Act.”