Donald Trump’s sweeping tax-cut bill has won approval from a key congressional committee, advancing it towards possible passage in the House of Representatives later this week. The bill, which would extend the 2017 tax cuts, is expected to add $3 trillion to $5 trillion to the nation’s $36.2 trillion debt over the next decade.
Key Elements of the Bill
- Tax Cuts: The bill proposes making the 2017 Trump tax cuts permanent, including:
- Child Tax Credit: Increasing the child tax credit from $2,000 to $2,500
- Small Business Deduction: Increasing the small business deduction from 20% to 23%
- Estate Tax Exemption: Raising the estate tax exemption to $15 million
- Border Security: Allocating $175 billion for border security legislation
- Energy: Repealing Biden-era EV tax credits and clean energy incentives
- Medicaid: Cutting Medicaid, which would kick 8.6 million people off the healthcare program
- Taxes on Tips and Overtime: Eliminating taxes on tips and some overtime income
Reactions to the Bill
The bill’s passage marks a victory for Trump and House Speaker Mike Johnson, but critics express concern over the potential increase in national debt. Moody’s downgraded the US credit rating due to rising debt concerns, citing it would reach 134% of GDP by 2035. Treasury Secretary Scott Bessent remains optimistic, arguing the bill will boost economic growth.
US Senator Chris Murphy said, “That is a big deal. That means that we are likely headed for a recession… These guys are running the economy recklessly.” Republican lawmakers are divided over how deeply to slash spending to offset the cost of the tax cuts.
Remarks from Americans and Economic experts from around the globe are expected to pour in like running water in the wake of this development in the United States, in a move that could potentially see global leaders as arm twisting the judiciary.