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The House Ways and Means Committee unveiled a 28-page draft of its proposed tax legislation late Friday, marking a significant step in advancing President Donald Trump’s goal to make the 2017 tax cuts permanent. The document includes selected tax measures while sidestepping more divisive issues ahead of a planned committee vote on Tuesday.
Key provisions in the draft legislation include:
- Increasing the Child Tax Credit to $2,500 until 2028, and $2,000 thereafter
- Eligibility requirement: Recipients must have a valid Social Security number
- Tax relief for multinational corporations and unincorporated businesses
Notably excluded from the proposal are several politically sensitive items, including:
- The $10,000 cap on state and local tax (SALT) deductions concerns high-tax states like New York, California, and New Jersey.
- The future of Medicaid, which serves over 35 million Americans in many states that supported Trump in 2024
- Decisions around clean energy tax credits, which benefit both Democratic and Republican-leaning states
Committee Chairman Jason Smith (R-MO) said the proposal reflects “two years of preparation” and that Republicans are ready to “deliver for the American people.”
Republican Infighting and Fiscal Uncertainty
The partial nature of the proposal highlights deep divisions among Republicans. While hardliners are pushing for $2 trillion in federal spending cuts, including potential reductions to Medicaid, moderates are resisting large-scale rollbacks of healthcare benefits.
The committee’s move comes as Congress grapples with the broader implications of Trump’s multi-trillion-dollar tax and immigration agenda, with Medicaid’s future and the debt ceiling also under debate.
The House Ways and Means Committee is expected to debate the legislation Tuesday afternoon in what could be the opening chapter of a contentious tax policy fight heading into the 2026 midterms.
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