GOP bill proposes new tax cuts. Here’s how it could impact your money.

Capital Hill budget hearings are ongoing as the House committee has approved the tax portion of the GOP budget plan, which includes possible cuts to Medicaid and SNAP. The proposed bill, backed by Republicans, contains new and unexpected changes that could affect millions of Americans financially. The bill aims to make President Trump’s 2017 tax cuts permanent and introduces various other reductions. If the 2017 Tax Cuts and Jobs Act provisions are extended, most taxpayers will not experience significant changes, as their tax brackets will remain as they have been since the cuts were implemented in 2018. Without an extension, over 60% of filers could face a tax increase in 2026. Additionally, the proposed bill includes an average tax reduction of $1,300 for taxpayers, along with promised cuts such as eliminating taxes on overtime pay. The legislative process is expected to alter the bill, with House Speaker Mike Johnson planning to send it to the Senate by Memorial Day. Democratic lawmakers have criticized the bill for its proposed cuts to Medicaid and food stamps, as the GOP aims to find $880 billion in savings to fund the tax cuts. Despite some concerns, the bill released by the House tax panel outlines several tax breaks that may become law, including deductions for seniors, an increase in the standard deduction for all taxpayers, extensions to the Child Tax Credit, and the elimination of taxes on tips and overtime pay, among other provisions.