House Republican Bill: $4 Trillion in Tax Cuts, But Not Enough Spending Cuts
Blah. I cannot take seriously any tax cuts until the government gets serious with spending cuts and that won’t ever happen.
Not enough.
The House Republicans dropped the 389 pages of “The One, Big, Beautiful Bill.”
Charles is correct:
A good bill would read: "The 2017 Tax Cuts and Jobs Act is hereby extended indefinitely. The 2022 Inflation Reduction Act is hereby repealed in full."
— Charles C. W. Cooke (@charlescwcooke) May 12, 2025
But alas…House Republicans don’t have a spine.
Tax cuts mean nothing if the government doesn’t make drastic spending cuts. You do not spend more than what you bring in.
We were promised $2 trillion in cuts, but now the goal seems to be $1.5 trillion.
We are more than $36 trillion in debt. The bill raises the debt limit by $4 trillion.
But this is the government we’re talking about! Money machine go bbbbrrrrrrrrr!
There’s no millionaire tax hike. It reduces tax breaks for professional sports team owners.
- Increased child tax credit ($2,000 to $2,500)
- SALT deduction cap for single and married couples ($10,000 to $30,000)
- No tax on overtime
- No tax on tips
- Middle and low income seniors deduct an additional $4,000
- No tax on auto loan interest
- 2017 tax cuts become permanent
- Expands 529 Education savings accounts
- College endowment taxes as high as 21% (hit large schools like Harvard) if the ednowment is over $2 million
- End the electric vehicle tax credit early
MAGA accounts for children.
Otherwise known as “Money Account for Growth and Advancement,” the bill makes them available for children:
In the case of any taxpayer with respect to whom an eligible individual is a qualifying child, there shall be allowed a one-time credit of $1,000 with respect to each such eligible individual who is a qualifying child of such taxpayer which shall be payable by the Secretary only to the MAGA account with respect to which such eligible individual is the account beneficiary.
No, the Republicans did not slash Medicaid. It tightened the eligibility factors (most illegal aliens are ineligible).
It’s the same for Medicare. However, the GOP added the usage of AI to reduce and recoup improper payments under Medicare.
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Comments
Are the SALT deduction caps gave the potential to reek havoc for the middle class, especially if you are single.
Don’t like the no taxes overtime. Plenty of people making good wages get overtime these days. That includes auto workers, nurses, and cops. Cops make out like bandits if your state requires a cop to sit on his ass looking at his phone at construction sites, no matter how small. Some of the highest government salaries in MA are given to cops and it is all because of overtime,
I don’t like the no tax on auto loans interest or I’d put caps on it or tie it to income in some fashion. Why subsidize someone Tesla or Mercedes, etc…
Why is there still no tax on second and third homes (Bernie) and on boats (Kerry),
I agree about cutting spending. Trump loves to spend money, at least he did the last time he was president. Congress will never really cut it. Too much payola for favored groups. I’d be happy if spending stayed flat allowing us to grow out of the debt.
SALT caps have been in effect for a long time…since 2017ish when Trump cut taxes.
They are actually a good way of balancing the country because these inflated states with inflated salaries and unlimited SALT deductions get more buying power and chew up all the real estate in Southern markets. Then, they come down with their arrogance and act like they should own the place.
Inflation can push middle class into cap, It’s bad enough that your property taxes can sky rocket but now you won’t be able to deduct them. They need some linkage with income.
Property tax deductions are separate from income tax deductions (SALTs are state and local income taxes)
Since when is a couple deducting 30k in STATE income tax in the middle class?
The current SALT 10K limitation applies to state and local income taxes, property taxes and sales taxes (not just income taxes).
That’s not entirely true because you can’t deduct both your state income tax and your sales tax anyways (it’s always been one or the other). You may have a point on property tax but most of the middle class is taking the higher standard deduction anyways. Thread starter is also complaining about overtime like people are somehow getting rich off of that. Overtime won’t be tax free…it just won’t levy an additional tax penalty on people who work a lot, as it never should.
You’ve noticed that too? It has become intolerable.
What do mean ‘no tax on 2nd homes/boats’? If you sell it for more than you paid then you pay tax absent other factors. You aren’t suggesting a wealth tax or federal tax on ownership of a 2nd home/boat are you?
The SALT deduction is insane at $30K. I could see an increase from the current $10K to $15K but damn, tripling it is Cray Cray and 4 NY Reps are still whining it isn’t enough. If you don’t want to pay super high State and local taxes….pack your crap and move somewhere else OR stay and vote the SoBs out of office until they lower them but that’s a you problem.
You should not be able to deduct interest on second + homes and vacation boats. I left off the interest part.
The problem I see is property tax. My town is ever eager to yank up my evaluation and therefore my property tax. That pushes me every closer to the cap. As soon as I need to tap my IRA which I’ll be forced to do I’ll hit the cap. I’m sure there are a lot of seniors in my position. Penalized again for doing everything right.
Property tax is imposed by your State and Local Gov’t and you can mitigate that by moving. As an example in El Paso TX my property tax was about $5,400 a year/$450 per month. I moved back to Alabama and the Annual property tax is less than $400. Similar home/land value.
Would you also disallow the interest deduction for a rental property? If not then you put small investors and individuals at a disadvantage to better capitalized investors and ‘black rock’ will end up owning even more residential properties.
IMO, the better solution is to gut the entire tax.code. set a 15% rate for both income and capital gains tax. A simple standard deduction of $20K and that’s it. No credits, no other personal income tax deduction on W2 income. For corporate tax the same 15% rate on net income.
I agree that capital gains and income should be taxed at same rate.
I don;t have problems with a progressive brackets but the brackets need to make sense and adjust with inflation. People making over 250k can afford to pay more,
No caps on medicare and ss.
VAT tax which is a consumption tax makes sense, However tax rates should not be punitive.
BTW: Not everyone can just pick up and move. People have circumstances that ties them to where they are whether they like it or not.
Well I’d agree that people have things that they have prioritized (fond memories, sense of.commumity) over other things like high State/local taxes which they use as justification not to move. That is totally fine but having voluntarily made the trade off they gotta live with their choice.
FWIW the top 10% of wage earners pay the lion’s share of federal income taxes already. The bottom 50% only pay about 3-4% of the total federal income taxes. A flat tax of 15% would still have the high income earners paying substantially more revenue into the Treasury. If person A makes 115K and person B makes 1,015,000 and both use the 15K deduction then person A pays 15K while person B pays 150K. He makes ten times as much so he pays ten times as much as person A.
Of course, just like the legal system. You’d be an easy inmate to handle, so they don’t mind putting you in prison. A gang banger? Unwanted, keep him out of prison!
The Republicans are just throwing money away. The only SALT proposal that made any fiscal sense was the one to leave it at 10K for singles and double it to $20K for marrieds. It was against standard practice not to have that in the first place, as other flat deductions, like the Standard Deduction, work that way.
I am opposed to doubling any tax provision due to marriage. Income tax is on the individual earner and if the Spouse is employed then they pay their own taxes and make their own deduction. Personally I would suggest a flat tax with one deduction per wage earner, no credits and no other deductions….which is basically 85% +/- of what filers already do now, they don’t itemize they take the standard deduction.
We were talking about the SALT deduction. Two single working people get $10K each for SALT . They get married and they suddenly lose $10K if they file jointly. (If they file separately they get $5K each, a marriage penalty.) That is nuts and not the way the tax code generally works, as I pointed out for the standard deduction.
Agreed. What I am trying communicate is a tax.policy of eliminating all categories of tax filing except individual taxpayer returns. So there wouldn’t be a joint return but two separate returns assuming each Spouse had earned income. Each could claim the standard deduction assuming they had the equivalent of full time work 2,000 hours at 7.50 an hour (15K) and it would be prorated downward on the same scale if that person had less than 15K in earnings. There shouldn’t be unfavorable tax treatment based on marriage nor should there be a tax advantage based on marriage.
I agree on overtime. I also think there could be gaming of the system that costs very big bucks. All of a sudden a 35 hour work week will become standard? Also, why should someone getting an extra boost in income get a tax break, in effect paid for by the person who had no such benefit.
What is going to happen is you’ll have salary employees effectively subsidizing hourly employees. As a salaried employee I worked zillions of overtime hours without compensation. I would have made out as a bandit if I had been a consultant and worked hourly and was asked to work overtime.
These people aren’t thinking which doesn’t surprise me and is almost always the case.
What do you mean you don’t like the no taxes on overtime? Your entire statement makes no sense. The people working overtime will see an immediate boost in their paychecks as overtime often forces the worker into a higher bracket and they paid more because of it.
Taxes on second or third homes? Why? Penalize people that have more than you do? They can pay the same taxes as everyone.
Don’t care about taxes on auto loan interest but if I bought a vehicle it would make a difference I guess. It doesn’t just affect people buying a Tesla, it’s for every vehicle sold.
The SALT should be eliminated and the people in blue states forced to deal with the out of control governments they continue to vote in.
Did I just read a $1,000 welfare payment to every kid? Why are we doing this?
This is a mash of not very good stuff. How about we go back to 2019 pre Covid spending and start from there. Where is the reigning in of government employment set in law? Where is the reduction in the massive increase in spending? Where is the repeal of the Green New Scam?
There are some good points but I’m vastly disappointed in this
Ny statement about overtime makes a lot of sense. Overtime is income and often at a higher rate. Why should that income be exempt? There are already a lot of hourly wages that lead to greater incomes than salary wages and that’s without overtime. Not everyone hourly makes minimum wage. You want to do this then you have to be some caps in place like overtime for workers making base pay less than say 35/hour are exempt from taxes.
Second and third homes are luxuries. I’m not subsidizing your luxury. You don’t get to deduct interest on mortgages. Same with boats not used as a business.
Well, considering all the pitfalls, traps and landmines that have been laid I can hope this is a step in the right direction without resorting to insurrection.
Make TEA Parties Great Again.
Spending cuts are where things really need to happen with one exception. Tariff money should go back to US consumers and/or to US producers that are hurt by reciprocal tariffs.
Not a fan of all this but…. for a 1st year budget given the thin margins and deliberate chicanery by Biden admin and political opposition it will have to do. Hopefully we.can get Congress to add in the cuts of Cray Cray DOGE is ID and get a leaner budget next year. Gonna need the WH to send up a budget that incorporates those cuts though and then push reluctant Congress to make current year spending cuts.
It would be midterm election suicide to cut a lot of popular programs. We all know it would be great, but they would lose the House if they did.
They’ll lose the House anyway and then no longer be able to do it. The first 2 years of any administration are the chance to get something done.
If they want to save the election, they should do the hard stuff this year. It will be closer to election and harder next year. Then impossible in years 3 and 4. This was it.
Every midterm election cycle is followed by a Presidential election cycle which also has the entire of the HoR and 1/3 ish of the Senate up for re-election. There isn’t a ‘good’ period or a ‘safe’ period to cut federal spending without facing pushback.
Blah. I cannot take seriously any tax cuts until the government gets serious with spending cuts
IIRC, the deficit is in the range of a trillion dollars. Which means that spending cuts are of top priority.
I’m surprised it was only 389 pages instead of the usual 1,000 to 1,500. I’m not surprised that the GOP didn’t walk the walk. Again.
Congressional Republicans are useless.
As I’ve stated before if they keep spending flat AND not spend the DOGE savings we can eventually grow tax income sufficiently to fix this issue. It may take 20 years but so what.
Nope. Here’s an easy example of how that won’t work. We have about $7 Trillion in Federal debt maturing this year. Interest rates are higher now than they were when the debt was issued; much of it at 2% or so. Current rates are over 4% so that means the cost to finance that $7 Trillion of debt will basically double. That means to keep spending ‘flat’ other programs gotta be cut.
Here’s another example; SSI. In 10 years all of the prior accumulated holdings in the ‘trust fund’ that the Treasury borrowed will have been paid back with interest to the SSI ‘trust fund’. We spend about $1.5 Trillion from SSI to current beneficiaries but in a decade will only have SSI revenue from SSI taxes to fund about 75% of benefits. If hold it constant for simplicity then we are short 25% or about $375 Billion. That means we gotta come up with the $375 Billion from general revenues (which means offsetting cuts to other programs) or raise SSI taxes or cut benefits.
Current year spending cuts are the only reliable way to reduce the size, scope and cost of gov’t.
DOGE saving are essentially spending cuts if they don’t spend it (which they will).
They should remove the cap on SS and frankly extend it to all income (I hate hedge fund managers).
I have no problem with making more cuts, I won’t hold my breath. They are also likely to spend more especially on military because a lot of military spending has been wasted. They’ve royally screwed up ship building (Littoral, Zumwalt, new Frigates) and they’re going to screw up airplane procurement. They also want a lot of new coastguard cutters,
Other than the Silent generation and Boomer generation there’s very little appetite for additional SSI taxes. Practically zero among working age population.
Most people are not comprehending the coming issue with SSI. There gonna be a 25% ish hole b/c all the IOU from the trust fund will have been repaid in about a decade. That’s a funding gap of $375 billion ish in current dollars. So we have three choices:
1. Take the 25% cut to benefits and STFU
2. Find $375 billion ish from other program.spending to plus up SSI tax revenue to meet the ‘promised’ benefit levels
3. Raise taxes
I suppose there’s a fourth option of printing money to make.the payments but the inflationary result is pretty damn bad for zero real gain.
I suspect that there will be considerable resistance from even average folks to raising SSI taxes or just caps b/c they realize it will eventually hit them. If Silent gen and Boomers are.willing to retroactively hand over the difference between 12.4% from early ’90s on ALL their prior earnings removing the very low caps then perhaps that could be sold to Gen X, Millennials, Gen Z and Gen A who will be entering the workforce. Somehow I doubt the Silent gen and Boomers will be willing to hand over a lump sum to SSI to make it fair across generational cohorts.
Not at all surprised. The only thing any of those idiots in Washington knows how to do is throw money at problems even when money won’t do a damn thing to fix the problem. And unfortunately the largest line items in the federal budget are mandatory. The the only thing towards the top that’s not mandatory is the military budget and no one in the right mind is going to cut that. So no, I never held out hope that they were going to cut a lot of spending. But if they want to steal less from me in taxes I’m all in favor of that. Because I don’t want to pay for most of what the government does. Especially as most of it is not enumerated in the constitution.
I was hoping for principled cuts that would vanish some unwanted departments, using the power of the purse for a political goal. This was the chance to do it. If not now, I don’t expect any more chances.
Car loan interest now tax deductible like home mortgage interest. For a world where nobody outright owns their car, but they’re happy.
Expands 529 savings plans so you can spend even more on college. Yay.
Meh.
I want to point out clearly that this is the first and last chance to do the DOGE related spending cuts. Last chance.
President’s party very consistently loses seats in the House in midterm elections. At the moment the margins are razor thin, so expect a Dem House in the next Congress. Then nothing will get passed.
Next year the R’s will be all about trying to save their seats in the upcoming election. Nothing will get done next year.
This year was it. Instead it’s a plain old regular Republican tax cut bill.
At least it wasn’t 1,000 pages plus dropped the night before the vote.
Well, Republicans will lose in the midterms.
That would probably happen anyway. But this will keep their base at home and ensure it.
The GOP is worthless, they NEVER follow through on their commitments. The Dems, although Satanic these days, at least do what they say they’re going to do.
America is doomed, only a matter of time.
You really need to look at the specific language in the bill. The headlines do not explain the requirements.
For example, there is allot of requirements in the bill that would allow a deduction for overtime. Workers making allot of money will not qualify.
https://www.congress.gov/bill/119th-congress/house-bill/561/text/ih