House Republicans have released tax provisions from their fiscal bill, showcasing several compromises aimed at achieving passage. Notably, they rejected a proposed millionaire tax while maintaining a top personal tax rate of 37%. State and local tax deduction caps have been raised to $30,000 but may not satisfy lawmakers from high-tax states like California and New York. Additionally, certain income exemptions aim to benefit business interests, as tips and overtime income will not be taxed through 2028. This evolving fiscal strategy reflects both intra-party negotiations and external lobbying pressures.
The House GOPâs plan excludes a millionaire tax proposed by Trump that aimed to impose a higher rate on those earning over $2.5 million, maintaining the top rate at 37%.
Business interests successfully lobbied for numerous tax breaks while avoiding increases on levies that would affect renewable energy projects, immigrants, foundations, and colleges.
The proposed limit on state and local tax deductions will increase to $30,000, but high-tax state Republicans argue it's insufficient, potentially jeopardizing the bill's approval.
The bill also exempts tips and overtime pay from income tax until 2028, reflecting an alignment with business interests and Republican priorities.
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