Skip to content
Crime-and-justice — Real-estate — Energy — Wealth-management — Lifestyle — Wearables — Cybersecurity — Technology — Cooking — Outdoor-living — Public-transit — Investing — Smartphones — home-improvement — Automotive — Politics — Climate-change — Fashion-and-beauty — Stock-market — budgeting — general-news — War-and-conflicts — sustainable-living — Personal-finance — Food-and-drink — Fintech — Baking — Health-and-wellness — Venture-capital — Renewable-energy — gardening — Finance — Industry — home-and-garden — Debt-management — Gadgets — Oil-and-gas — Medicare — Private-equity — Science — Smart-home-devices — Saving — Interior-design — Transportation

GOP's Initial Plan for Trump's Comprehensive Tax and Budget Reduction Bill Revealed in Draft

GOP unveils significant and contentious aspects of proposed tax and budget reduction plan, widely referred to as President Donald Trump's "grand, attractive legislation."

,   and  Administrator
6 min read
Republicans, led by House members, commence disclosing significant facets of the extensive tax and...
Republicans, led by House members, commence disclosing significant facets of the extensive tax and budget reduction plan – widely recognized as President Donald Trump's "grand bill."

GOP's Initial Plan for Trump's Comprehensive Tax and Budget Reduction Bill Revealed in Draft

Unleashing the Wave: Unpacking the Ultra-Conservative Tax and Expenditure Cuts Package

There's a shaking up in the halls of Congress and Wall Street as the dust settles on President Donald Trump's grand, revolutionary tax and spending cuts legislation, better known as his "eye-popping, mind-boggling bill". Key details of this groundbreaking package have finally come to light, and the nation anticipates measurable economic and societal impacts.

The Ways and Means Committee drew back the curtain, revealing their long-awaited tax restructuring plan aimed at extending billions in tax cuts set to expire at year's end, which include endorsements of old campaign promises, like exempting tips from taxation. Furthermore, they've cooked up additional enticements such as beefing up popular child tax credits and creating MAGA kids' savings accounts.

Meanwhile, the House Energy and Commerce Committee took center stage, unveiling their touchy, contentious spending on Medicaid reduction proposal, even though it does not slash as deep into the program as some conservatives would prefer. Both committees have more tweaking to do before their proposals are put up for a vote.

This comprehensive package is poised to prolong the GOP's already successful Tax Cuts and Jobs Act as well as satisfy multiple Trump campaign promises. To counterbalance these gargantuan tax reductions, which amount to trillions of dollars over the next decade, the House has cookied up a minimum of $1.5 trillion in spending cuts.

Republicans are also giving the nod to fulfilling other Trump campaign vows, like major investments in US-Mexico border security, immigration curbs, and beefing up missile defense systems. Furthermore, there's a queue of age-old GOP policy goals, like revamping the chopped, disheveled US air traffic system, targeting electric cars, and weaning ourselves away from federal student loans.

Eleven House committees are in the thick of it, tackling piecemeal elements of this colossal bill, then slapping them together to form the final package. Speaker Mike Johnson hopes it'll go before the vote by Memorial Day, so let's cross our fingers and hope he's not biting off more than he can chew. The Senate, however, has their tongue firmly in their cheek and a differing opinion on how the package should pan out. The upper chamber also has strict rules imposing stringent limitations on what can be included within the package as they're pushing the legislation through via the budget reconciliation process to keepDemocratic support to a minimum in the Senate.

So here's the goss on some initial plan proposals flourishing within certain House committees for the legislative package:

Medicaid work requirements

In unprecedented fashion, certain Medicaid recipients between the ages of 19 to 64 would be liable to clock 80 hours monthly to hold onto their benefits. They can also fulfill the contrarian mandates by participating in community service, attending school, or joining a work program.

This requirement doesn’t apply to parents, pregnant women, sick folks, and substance abusers, amongst others. Republicans have been frothing at the mouth to add work requirements to Medicaid for years, with the first Trump administration granting waivers to several states to implement such a mandate, but such attempts have been quashed by federal courts.

The controversial mandate may send millions of people packing if they don’t comply. While many adults on Medicaid are gainfully employed, they may find it difficult to meet the reporting requirements, nabbing exemptions, or clawing enough hours each month to keep their eligibility unscathed.

Moreover, the plan mandates that Medicaid expansion recipients prove they are US citizens or legal immigrants, and eligibility checks will be performed every six months instead of annually. States that give Medicaid coverage to undocumented immigrants using state funds would be penalized with a 10% reduction in federal matching funds for the expansion population.

Child tax credit enhancement

The child tax credit would burgeon to $2,500 per child from 2025 through 2028, under the Ways and Means Committee's plan.

Additionally, parents would be required to furnish Social Security numbers for their children instead of the current individual taxpayer identification numbers previously used by non-citizens for filing federal taxes.

Magic money accounts for kids

The Ways and Means Committee also hatched a plan to create "money accounts for growth and advancement," or "magic accounts” for US-born babies from 2025 to 2028. The Federal Government would provide a $1,000 credit to kids' accounts. Annual contributions are capped at $5,000, and the funds can be used tax-free for higher education or purchased homes, to name a few options, when the beneficiary turns 18 and beyond.

Workplace tips and overtime bonuses

Occupations with traditional tipping would have a deduction provision for the income earned via tips on their tax returns, fulfilling a vital Trump campaign promise. The provision only applies to tip-earning jobs, with mega-tipped workers, making more than $160,000 in 2025, ineligible for the deduction. This measure would benefit around 4 million tipped workers.

Similarly, workers pulling overtime would be sheltered from taxes on their extra earnings. This provision is projected to help 80 million hourly workers.

Both perks would grant a tax break to taxpayers who don't itemize their deductions, which is the majority of Americans, but only from 2025 through 2028.

Golden years support

Elderly citizens can anticipate a $4,000 hike in their regular deductions from 2025 through 2028, according to the Ways and Means Committee's crafty plan, but the benefit zone will phase out for single earners with incomes surpassing $75,000 and couples earning double that amount.

This clever move attempts to fulfill Trump's campaign pledge to put an end to taxes on Social Security benefits, even though congressional rules prevent tucking such a measure into the budget reconciliation package used to advance the bill without taking in Democratic support in the Senate.

Car loan interest tax break

The Ways and Means Committee has proposed a wheezy, temporary interest tax deduction for car loan interests, reminiscent of Trump's campaign promises. Eligible taxpayers would have the option to deduct a maximum of $10,000 in interest yearly from 2025 through 2028. However, the savings are conditional, with single filers making more than $100,000 and married couples earning $200,000 losing their tax benefits before it gets off the ground.

The tax break applies to car loans from 2025, with those purchasing passenger vehicles that have their final assembly in the United States eligible for the break.

  1. The tax restructuring plan, revealed by the Ways and Means Committee, aims to extend tax cuts and support old campaign promises, such as exempting tips from taxation.
  2. In addition, the committee has proposed beefing up popular child tax credits and creating MAGA kids' savings accounts.
  3. The House Energy and Commerce Committee has proposed spending cuts on Medicaid, although not as deeply as some conservatives would prefer.
  4. Republicans are also focusing on investments in US-Mexico border security, immigration curbs, and missile defense systems.
  5. Eleven House committees are working on piecemeal elements of the legislative package, with the goal of presenting a final package for a vote by Memorial Day.
  6. The Senate, however, has strict rules and is pushing the legislation through via the budget reconciliation process to minimize Democratic support.
  7. A controversial proposal in the Medicaid work requirements would require certain recipients between the ages of 19 to 64 to clock 80 hours monthly to maintain their benefits.
  8. This requirement does not apply to parents, pregnant women, sick individuals, and substance abusers, among others.
  9. The plan would also mandate that Medicaid expansion recipients prove they are US citizens or legal immigrants, and eligibility checks would be performed every six months instead of annually.
  10. States that give Medicaid coverage to undocumented immigrants using state funds would be penalized with a 10% reduction in federal matching funds for the expansion population.
  11. The child tax credit would increase to $2,500 per child from 2025 through 2028, under the Ways and Means Committee's plan.
  12. Parents would be required to provide Social Security numbers for their children instead of individual taxpayer identification numbers.
  13. The Ways and Means Committee has also proposed creating "money accounts for growth and advancement", or "magic accounts" for US-born babies from 2025 to 2028.
  14. The Federal Government would provide a $1,000 credit to kids' accounts, with annual contributions capped at $5,000.
  15. The funds can be used tax-free for higher education or purchased homes when the beneficiary turns 18 and beyond.
  16. Occupations with traditional tipping would have a deduction provision for the income earned via tips on their tax returns.
  17. The provision only applies to tip-earning jobs, with mega-tipped workers, making more than $160,000 in 2025, ineligible for the deduction.
  18. Workers pulling overtime would be exempt from taxes on their extra earnings, benefiting around 80 million hourly workers.
  19. Both perks would grant a tax break to taxpayers who don't itemize their deductions, but only from 2025 through 2028.
  20. Elderly citizens can expect a $4,000 increase in their regular deductions from 2025 through 2028, according to the Ways and Means Committee's plan.
  21. The benefit zone will phase out for single earners with incomes exceeding $75,000 and couples earning double that amount.
  22. The plan attempts to fulfill Trump's campaign pledge to put an end to taxes on Social Security benefits.
  23. The Ways and Means Committee has also proposed a temporary interest tax deduction for car loan interests.
  24. Eligible taxpayers would have the option to deduct a maximum of $10,000 in interest yearly from 2025 through 2028.
  25. The savings are conditional, with single filers making more than $100,000 and married couples earning $200,000 losing their tax benefits before it becomes effective.

Read also:

    Related

    Latest