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Tax Cuts 2.0 Could Cost $600 Billion

Michael Rainey

President Donald Trump and House Ways and Means Committee Chairman Kevin Brady smile at each other as Senate Majority Leader Mitch McConnell (L), Vice President Mike Pence, U.S. Rep Don Young and Speaker of the House Paul Ryan look with other Congressional Republicans after the U.S. Congress passed sweeping tax overhaul legislation, on the South Lawn of the White House in Washington, U.S., December 20, 2017. REUTERS/Jonathan Ernst

Republicans in the House released a brief outline of their proposed next round of tax cuts Tuesday. The two-page document calls for making the individual tax cuts and pass-through deductions, which are currently scheduled to expire in 2026, permanent.

House Ways and Means Chairman Kevin Brady (R-TX) said that he expects the cost of those changes to come in at roughly $600 billion. No revenue raisers or spending cuts to cover the cost were mentioned.

The outline also calls for the creation of a universal savings account for retirement funds, a special tax break for startups and expanded use of 529 plans for educational expenses.

The outline does not mention any technical corrections for the tax law passed late last year, although retailers and other business-owners have been pushing lawmakers to fix various mistakes in the legislation. “Keeping those corrections out of the proposal underscores how GOP leaders are using it as a messaging tool and want to avoid highlighting problems with the law,” writes Bloomberg’s Laura Davison.

Although it’s not clear that the Senate will embrace a second round of tax cuts, Brady said he plans to move three separate bills this fall, each with a different theme – permanency, savings and innovation – with the timing of votes depending on levels of interest in each area.     

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