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House Republicans successfully passed a multitrillion-dollar tax breaks package in a late-night session that ended early this morning, with Speaker Mike Johnson commenting: “To put it simply, this bill gets Americans back to winning again.” The bill, which narrowly passed 215-214, with one lawmaker voting present, aims to extend $4.5tn in tax breaks from President Donald Trump's first term while introducing new ones, including exemptions on tips and overtime pay. The bill includes a temporary boost in the standard deduction — a $1,000 increase for individuals, bringing it to $16,000 for individual filers, and a $2,000 boost for joint filers, bringing it to $32,000. There is also a temporary $500 increase in the child tax credit, bringing it to $2,500 for 2025 through 2028, when it will return to $2,000. The estate tax exemption rises to $15m and is adjusted for inflation going forward. Small businesses, including partnerships and S corporations, will be able to subtract 23% of their qualified business income from their taxes. Republicans are also looking to prohibit Medicaid funds from going to Planned Parenthood, which provides abortion care. The Congressional Budget Office estimates that the proposed changes could lead to 8.6m fewer people having health care coverage and a $3.8tn increase in federal deficits over the next decade. Democrats criticized the bill, with House Democratic leader Hakeem Jeffries (D-NY) calling it “one big ugly bill.” The package also includes significant spending increases, particularly for defense and border security.
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