House Republicans have rolled out a sweeping tax reform proposal aimed at building on the 2017 Tax Cuts and Jobs Act, with a renewed focus on expanding relief for families, small businesses, and working-class Americans.
Dubbed the “Big Beautiful Bill,” the plan includes increasing the standard deduction by $1,000 for individuals and $2,000 for married couples. It also proposes raising the child tax credit from $2,000 to $2,500, while seeking to make the 2017 tax provisions permanent before they expire at year’s end.
The package is estimated to cost nearly $5 trillion over the next decade, prompting party leaders to suggest offsetting the revenue loss by increasing the top income tax rate to 39.6% for individuals earning more than $2.5 million and households earning over $5 million annually.
The plan has stirred debate within the GOP, particularly over a proposed $30,000 cap on state and local tax (SALT) deductions, a provision that lawmakers from high-tax states argue unfairly penalizes their constituents. Some members have threatened to withhold support unless the cap is raised even further.
In addition to tax changes, the bill outlines $1.5 trillion in federal spending cuts, targeting programs such as Medicaid and green energy subsidies. While some Republicans support the fiscal tightening, others are voicing concern over potential harm to lower-income families and essential services.
House Speaker Mike Johnson aims to pass the legislation by July 4, framing it as a bold economic milestone aligned with the nation’s 250th Independence Day. However, internal disagreements pose a challenge to pushing the bill through without significant amendments.