Tax breaks that could disappear
Some long-standing tax breaks could face elimination, according to the document:
Mortgage interest deduction: This could either be cut entirely or lowered to a $500,000 cap, with the former idea saving $1 trillion over a decade and the latter $50 billion over the same period.
"Head of household" tax filing status: This filing status provides a larger standard deduction for unmarried adults with children. Eliminating it could save $192 billion over 10 years.
American Opportunity Credit: This $2,500 tax credit is given for educational expenses amassed over the first four years of a person's higher education. Revoking it would save $59 billion over a decade.
Child and Dependent Care tax credit: This credit helps families with young children pay for up to $2,100 in annual child care expenses. Waiving it would save $55 billion over a decade.
Student loan interest deduction: Scrapping this deduction, used by people with student loan debt, could save $50 billion over 10 years.
Lifetime Learning Credit: This nonrefundable tax credit is equal to 20% of qualified tuition and related expenses under $10,000. Repealing it would save $26 billion over 10 years.
New tax breaks under consideration
The document also outlines several ideas for lowering taxes, in addition to eliminating taxes on overtime and tips. They include:
Eliminating the estate tax: This proposal would most benefit ultra-rich families given that the estate tax hits people with assets of nearly $14 million. Removing this tax would cost the U.S. $370 billion over 10 years.
Raising or eliminating the SALT deduction cap: Mr. Trump's TCJA introduced a controversial $10,000 cap on deducting state and local taxes, or SALT. Under the latest Republican proposals, the cap could be eliminated or raised to higher thresholds, such as $20,000 for married couples. The cost could range from $100 billion to up to $1 trillion, depending on the size of the change.
Making auto loan interest tax deductible: This idea, which was floated by Mr. Trump during the 2024 presidential campaign, could cost $61 billion over a decade.
While campaigning last year, Mr. Trump proposed scrapping the $10,000 cap on the SALT deduction, which he introduced in his 2017 tax bill. The issue has become increasingly unpopular among Republicans and Democrats alike, as rising home values and property taxes across the nation means more homeowners are feeling the pinch from the deduction limit.
"The SALT cap was effectively one of the biggest pay-fors in the 2017 legislation, and raising it is expensive," the Tax Policy Center's Rosenberg said. "The president recently signaled again that the most likely direction is for the SALT cap to be raised rather than to be eliminated."
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