JCT: House GOP tax plan could cost $5 trillion. A preliminary estimate from the Joint Committee on Taxation (JCT) finds the House GOP’s first draft of a major 2025 revenue bill would cost nearly $5 trillion over 10 years. That’s already a half trillion more than the House budget resolution permitted under a best-case scenario pushed by deficit hawks to have at least $2 trillion in corresponding spending cuts. The partial plan would extend expiring provisions from the 2017 Tax Cuts and Jobs Act and make some of those measures more generous. The plan would temporarily boost the standard deduction and child tax credit. But the legislation does not yet include President Trump’s signature proposals to eliminate taxes on tips and overtime, TCJA-related business tax deductions, and the state and local tax deduction cap (a key issue for swing-district GOP lawmakers in high-tax states). TPC will have a new analysis of the proposal later today.
Options for strengthening the Child Tax Credit. TPC’s Elaine Maag examines ways Congress could improve the CTC as part of the TCJA extension. Proposals include: accelerating the credit’s phase-in to help low-income families ($48.5 billion); making the credit fully refundable for newborns ($7.5 billion); and expanding eligibility to 17-year-olds and increasing the credit to $2,500 ($229.5 billion). While broad expansions skew toward middle- and upper-income households, more targeted reforms could provide meaningful support for working families at a lower cost.
Complex tax cuts are harder for taxpayers to claim. As GOP lawmakers try to trim costs on Trump’s campaign tax ideas, simplicity is a casualty. TPC’s Howard Gleckman explains how scaled-down versions of tax-free tips and overtime pay exemptions could come with income limits, deduction caps, and confusing eligibility rules. These would increase the taxpayer’s filing time and costs and likely require new regulations at a time when the IRS is short-staffed. Even if some taxpayers get a break, they may find it harder to figure out if they qualify.
Funding tax cuts with cuts to Medicaid and SNAP would hurt low-income families. According to new analysis from the Urban Institute, extending the TCJA and paying for it with deep cuts to Medicaid and SNAP would leave low-income families worse off even after accounting for tax reductions. Families earning under $10,000 would lose an average of $2,700 in net income, while those earning above $200,000 would gain more than $13,000. Middle-income households would see only modest net gains.
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