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The House Ways and Means Committee advanced a sweeping tax bill Wednesday, cementing a key milestone for President Donald Trump’s 2025 economic agenda. The measure, which includes a permanent extension of the 2017 tax cuts and targeted business breaks, passed along party lines in a 26-19 vote following a tense, overnight markup session.
While the approval marks momentum for Trump’s “big, beautiful bill,” the broader legislative package, including controversial proposals on Medicaid and SNAP (food assistance), still faces hurdles in other committees and could miss its Memorial Day passage target.
Key Provisions in the Tax Package
Spanning 389 pages, the tax portion of the bill includes several of Trump’s top priorities, echoing promises made during his 2024 re-election campaign. Among the central provisions:
- Permanent extension of 2017 tax cuts to individual rates ranging from 10% to 37%, estimated to cost $2.2 trillion through 2034.
- Expanded Section 199A pass-through deduction, a significant benefit for small business owners and top earners, allowing them to deduct over 20
- % of business income.
- Increased Child Tax Credit: Raised from $2,000 to $2,500 per child until 2028.
- Elimination of taxes on tips and overtime pay aimed at benefitting lower-income and hourly-wage workers.
- $4,000 extra deduction for older Americans, in lieu of cutting Social Security taxes.
Although the package includes offsetting spending reductions, the net cost of the tax cuts is estimated at $3.7 trillion, according to internal budget analyses.
Who Gains the Most?
New data reveals that wealthier households would reap the largest benefits under the proposal:
| Income Bracket | Avg. Tax Cut (2027) | Total Reduction |
|---|---|---|
| $30K–$80K | ~15% | $49.6 billion |
| > $1M | 8.6% | $384.6 billion |
| Lowest 20% | — | $3.6 billion |
| Second 20% | — | $24.4 billion |
| Above-median | — | $106.3 billion |
The SALT Deduction Showdown
The state and local tax (SALT) deduction cap remains a key flashpoint.
Under current law, individuals can deduct up to $10,000 in SALT payments from their federal taxes ($5,000 for married filing separately). These caps, part of the 2017 tax reforms, are set to expire by year’s end.
The proposed bill raises the deduction cap to $30,000 for households earning less than $400,000. However, this has been firmly rejected by the SALT Caucus, a bipartisan group of lawmakers from high-tax states like New York and California. They argue the new threshold is “insulting” and doesn’t adequately address cost-of-living disparities.
House Speaker Mike Johnson (R-LA) had promised a compromise but later postponed the resolution pending updated calculations from the Joint Committee on Taxation. Lawmakers warn that the issue could derail Republican unity when the full House votes.
Medicaid and SNAP Stalemates
While the tax portion progresses, other committees are stalled:
Medicaid
The Energy and Commerce Committee faces internal GOP disagreements over proposed work requirements for Medicaid recipients. Some Republicans favor delaying implementation to avoid political backlash in the 2026 midterms. Democratic members, including Rep. Alexandria Ocasio-Cortez, have fiercely opposed any cuts to the social safety net.
SNAP (Food Assistance)
The Agriculture Committee resumed work Wednesday after overnight delays. Despite early resistance, GOP members now appear more unified behind efforts to overhaul the Supplemental Nutrition Assistance Program.
What’s Next?
The tax bill now moves to the House Budget Committee, where it will be merged with spending legislation from other committees. A full House vote could come as early as next week, but significant changes are expected in the Senate, where Democratic opposition and moderates’ concerns could reshape the final version.
Speaker Johnson has reiterated his commitment to delivering on Trump’s agenda, but with unresolved tensions over SALT, Medicaid, and SNAP, the Memorial Day deadline looks increasingly unlikely.
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