The House Ways and Means Committee released on Monday its text of the tax portion of the reconciliation bill, the GOP is looking to pass to enact key parts of President Donald Trump’s agenda.
It would make the 2017 income tax cuts permanent, increase the child tax credit, and have no taxes on tips or overtime. The changes resulted in several bands of tax brackets of between 10 percent and 37 percent, with most people’s taxes lowered.
It includes a $30,000 cap on the State and Local Tax Deduction (SALT). Congressional Republicans from New York, New New Jersey and California, have called for a higher amount and have said they will not vote for the bill unless the limit is drastically increased.
Conservatives have criticized SALT as being a way for GOP-led states to subsidize Democrat-led states such as New York and California that have high taxes.
The text also consists of eliminating energy tax credits that were allocated under the Inflation Reduction Act during the Biden administration.
Additionally, the legislation would increase taxes on the endowments of some colleges and universities.
Schools with an endowment between more than $750,000 and $1.25 million per student would see a 7 percent tax; those between more than $1.25 million and $2 million per student would be taxed at 14 percent; and institutions that are more than $2 million per student would be taxed at 21 percent.
Harvard, Princeton, Soka University of America, Yale, Stanford, and MIT would pay the 21 percent rate, while schools like Amherst College, Williams College, Swarthmore College, and the University of Notre Dame would pay the 14 percent tax.
The committee text also includes a debt limit increase of $4 trillion.
This is the limit of how much the United States can borrow to pay off its loans.
Were the debt ceiling not increased by the time what is known as the “X date” is reached, the United States would default on its loans, causing detrimental effects to both the American and global economy.
This could include job losses, the stock market crashing, and even a recession.
“A failure to suspend or increase the debt limit would wreak havoc on our financial system and diminish America’s security and global leadership position,” wrote Treasury Secretary Scott Bessent.
The “X date” is likely to be reached in August, Bessent told House Speaker Mike Johnson (R-La.) in a May 9 letter.
—Jackson Richman
BOOKMARKS
Trump told reporters on May 12 that he compelled India and Pakistan to reach a cease-fire agreement by threatening to withdraw trade from both countries. “We never used our powers that way,” Trump said of the unusual peace maneuver.
Trump signed an executive order on Monday that aims to reduce prescription drug prices by as much as 80 percent for U.S. customers. It requires drug companies to charge Americans the lowest price they charge for some of the same medications in other developed countries.
The stock market shot up more than 1,000 points on May 12, bolstered by the news that the United States and China were easing their mutual tariffs.
The Department of Homeland Security is looking into allegations that Los Angeles County’s California’s Cash Assistance Program for Immigrants was providing federal benefits for undocumented immigrants. Homeland Security alleges that more than 2 million illegal immigrants were issued Social Security numbers in 2024.
Baja California Gov. Marina del Pilar Ávila and her husband, Carlos Torres, have had their U.S. visas revoked—but they have not publicly revealed why. “I am sure and fully trust that the situation will be clarified satisfactorily for both of us,” Pilar wrote on X.
—Stacy Robinson
