House Republicans released the detailed tax framework of their sweeping fiscal bill on Monday, May 12, — a cornerstone of Donald Trump’s “One Big, Beautiful Bill.” The legislation proposes widespread tax cuts and targets elite universities, green energy incentives, and remittances sent abroad, reflecting Trump’s campaign agenda. The proposal follows weeks of intense GOP negotiations.
While corporate interests secured key victories, the bill also included measures aimed at working-class voters, such as making tips and overtime pay tax-free through 2028 and allowing deductions for auto loan interest retroactive to January 1, 2025.
No tax increase for the wealthy
Contrary to speculation, Republicans rejected Trump’s own proposal to hike taxes on ultra-wealthy individuals earning over $2.5 million. Instead, the bill locks in the current top income tax rate of 37%, avoiding the scheduled jump to 39.6% in 2026.
SALT deduction relief — But not enough for some
The cap on state and local tax (SALT) deductions would rise to $30,000 for joint filers ($15,000 for singles) but phases out above $400,000 in household income. Lawmakers from high-tax states like New York and California say it falls short and are threatening to withhold support.
Targeting elite universities and foundations
In a significant expansion of Trump’s cultural offensive, the bill would sharply increase taxes on wealthy university endowments, with rates reaching up to 21% depending on endowment size and enrollment. Institutions like Harvard, Yale, and Stanford would be heavily affected. Private foundations — including the Gates Foundation — would face new tiered tax rates of up to 10%.
Slashing EV and green energy incentives
The legislation rolls back much of the Biden-era climate policy, ending electric vehicle tax credits by 2026 and phasing out clean energy incentives by 2031, including wind, solar, and nuclear production credits.
Boost for seniors
Seniors over 65 who don’t itemize deductions would get a $4,000 boost to their standard deduction through 2028, phased out for individuals earning above $75,000 and couples above $150,000.
New tax on remittances
A controversial 5% tax would be imposed on remittances sent abroad — a move that could hit immigrant families hardest. U.S. citizens could apply for a credit to offset the tax.
Big business and manufacturing incentives
The bill extends lower tax rates for foreign income earned by multinationals and reinstates 100% depreciation for domestic manufacturing investments. It also revives a temporary R&D tax deduction through 2029 — a major win for tech and industrial sectors.
Child tax credit expansion, “MAGA Accounts” introduced
The child tax credit would rise to $2,500 per child through 2028 before reverting to $2,000. The bill also proposes new tax-exempt “MAGA Accounts” — savings plans allowing up to $5,000 annually per child, usable for education, home purchases, or small business start-ups.
Next steps: House vote this week, senate revisions expected
The House Ways and Means Committee will vote on the bill Tuesday, with a full House vote anticipated before May 26. Republicans aim for Senate passage by July 4, though significant revisions are expected. With Democrats opposed, GOP leaders must hold their slim majority together to push the bill through.
House Speaker Mike Johnson expressed confidence the bill will clear the House by Memorial Day, setting the stage for a July 4 finish line.