House Republican leaders said that major legislation to extend President Trump’s 2017 tax cuts would also cut taxes on tips and overtime pay, cut federal taxes on Social Security payments for low- and middle-income seniors and much more.
On a conference call with GOP lawmakers, House Ways and Means Committee Chairman Jason Smith of Missouri said the measure would index the child tax credit for inflation and would boost the standard deduction, permanently, by $2,000 for working families, according to those on an afternoon briefing call with Republican lawmakers.
The measure, part of President Trump’s “big, beautiful bill,” would also allow deductions for auto loan payments for cars made in America.
“We achieve an extension of Trump tax cuts and deliver on the president’s tax cut promises at $5 billion under reconciliation instructions,” Mr. Smith said, according to participants on the call.
The legislation would make additional “pro-family improvements” by indexing the child tax credit to inflation and would lower health care costs by expanding the availability and usage of health savings accounts.
It would raise the estate tax threshold for family farms and end the “assault on gig workers” who are now subject to $400 IRS reporting requirements.
Seniors earning up to $75,000 a year on Social Security would see an additional $4,000 deduction, according to the legislation.
Others, like elite universities, could see higher tax bills.
The legislation would hike the endowment excise tax for certain universities so that the largest endowments, including at Harvard University, would be subjected to the corporate tax rate of 21%, up from 1.4% under current law.
In an earlier call, Republicans announced the measure would reintroduce the federal income tax deduction for state and local taxes, or SALT, which was reduced to $10,000 in the GOP’s 2017 tax cut bill. The new legislation would allow up to a $30,000 deduction for married filers and would be phased out for household incomes of $400,000 or more. For individuals, the deduction would be capped at $15,000 and phased out for those earning $200,000 or more.
