House Republicans have seemingly dropped plans for a new millionaire’s tax hike to pay for other priorities in President Donald Trump’s ‘big, beautiful bill.’
The Ways & Means Committee, the House’s tax-writing panel, released nearly 400 pages of legislation on Monday, setting the stage for permanently extending Trump’s 2017 Tax Cuts and Jobs Act (TCJA), as well as a host of other new Trump tax priorities.
That includes no taxes on tipped and overtime wages, both of which are accomplished via new tax deductions.
For Trump’s promise to cut taxes on seniors’ Social Security, the legislation temporarily increases the standard tax deduction that seniors are allowed to take, affecting the end of last year through the beginning of 2029.
It would also raise the debt limit by $4 trillion – something Trump specifically asked Republican lawmakers to deal with before the U.S. runs out of cash to pay its debts sometime this summer, risking a national credit default.
Notably absent from the sweeping piece of legislation is a proposal floated last week that would have established a new tax bracket for people making $2.5 million per year or more, taxing them at 39.6% – which was the top tax rate before TCJA lowered it to 37%.
Conservative groups like Americans for Prosperity and the Heritage Foundation fiercely fought any notion of a tax increase on the wealthy.
It was also publicly opposed by a number of leading Republican figures like former Speaker Newt Gingrich and ex-Vice President Mike Pence, along with Pence’s interest group, Advancing American Freedom.
Several House GOP lawmakers told Fox News Digital last week they could not support a millionaire’s tax hike.
Two people familiar with discussions told Fox News Digital on Monday that they did not expect it to be included before the bill advanced through committee on Tuesday.
But Republicans find other cost-savings in the legislation, including stripping tax-exempt status from ‘terrorist-supporting organizations’ and using artificial intelligence (AI) software to identify and root out improper Medicare payments.
The bill would also dramatically reduce tax breaks for professional sports team owners, a measure known as amortization, which allows those owners to write off a portion of their purchase price.
Republicans also target large private colleges and universities, including Ivy Leagues, with higher excise taxes, which are federal duties paid on net earnings of the schools’ investments.
That rate is currently 1.4%. But the legislation would bring it to as high as 21% for the largest schools, like Harvard University and Yale University – as Trump continues to battle Ivy League over their funding.
The Ways & Means Committee is expected to advance its portion of the legislation on Tuesday afternoon.
It’s just one portion of Trump’s so-called ‘one big, beautiful bill,’ which Republicans are working to pass via the budget reconciliation process.
By lowering the Senate’s threshold for passage from 60 votes to 51, it allows the party controlling Congress and the White House to entirely skirt the minority and pass sweeping pieces of legislation – provided they deal with the national debt, tax, or spending.
Trump wants Republicans to use it to pass his agenda on taxes, the border, immigration, energy, and defense.
Meanwhile, the U.S. is currently more than $36 trillion dollars in debt.
House Republicans have pledged to find between $1.5 trillion and $2 trillion in cost savings in other areas to offset the cost of Trump’s new priorities and put the U.S. on a better fiscal path.
The tax legislation also increases the maximum allowed child tax credit (CTC) from $2,000 to $2,500, and includes added tax relief for small business owners who file their company under individual income tax brackets.
It also includes a modest victory for blue state Republicans in increasing the state and local tax (SALT) deduction cap from $10,000 to $30,000 for both single filers and married couples. Married taxpayers filing separately get a cap of $15,000.
That maximum amount gets phased out if a person’s income exceeds $400,000, back down to $10,000 once a person’s income hits $500,000.
SALT deductions are primarily aimed at helping people in high-cost-of-living areas, particularly people in the suburbs of Democratic strongholds like New York and Los Angeles.
Republicans representing those areas have said increasing the $10,000 SALT deduction cap is critical to them remaining in office – and therefore to the GOP keeping the House majority.
Several SALT Caucus Republicans balked at a $30,000 cap last week, blasting it as insufficient. It’s not clear if they will hold up the final bill over it, however, with at least one member of their group, Rep. Nicole Malliotakis, R-N.Y., told Fox News Digital she could agree to the new threshold.
The Monday release comes after Republicans unveiled a portion of their tax plan over the weekend. Other details like SALT deduction caps and potential new tax brackets were still being worked out, however.