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House Republicans have introduced the first portion of their long-awaited tax reform package, aiming to appeal to middle-class voters ahead of next year's elections by bolstering popular provisions like the Child Tax Credit and the standard deduction.
Though the 28-page bill omits some of the most contentious policy changes still under discussion, it sets the stage for a larger legislative effort intended to avoid the expiration of key tax breaks set for the end of 2025.
Among the most attention-grabbing proposals is a temporary $500 increase in the Child Tax Credit, which would raise the total benefit to $2,500 per child through 2028 before reducing it to $2,000 afterward.
Importantly, the credit would be indexed to inflation to preserve its value over time. This move seeks to counteract the looming reduction of the credit back to $1,000, a scenario that would hit tens of millions of American families if Congress fails to act.
The package also includes a $2,000 hike in the standard deduction for married couples, bringing it to $32,000. Both provisions are designed to take effect for the current tax year-allowing taxpayers to potentially see larger refunds when they file in 2026, just months before the next round of federal elections.
GOP eyes Trump-era tax extension while delaying controversial offsets
Republicans are also seeking to permanently extend the lower income tax rates originally enacted in the 2017 Trump tax cuts. Notably absent from the proposal, however, is any increase in the top income tax rate on the wealthiest Americans-an issue that has been the subject of considerable internal GOP debate.
The plan also includes changes to the estate tax, easing burdens on high-value estates, and extends a generous break for owners of -through businesses.
Business tax cuts don't stop there. The GOP package proposes reducing rates on lesser-known international tax regimes that affect multinational corporations. Critics are likely to argue that these provisions heavily favor large businesses and the wealthy, a point Republicans hope to deflect by emphasizing the bill's middle-class benefits.
Missing from this initial bill are the controversial tax hikes meant to offset some of these breaks-such as possible increases on college endowment earnings or the rollback of Biden-era green energy subsidies.