An updated forecast from the nonpartisan Joint Committee on Taxation shows a tax package from House Republicans would cost $3.7 trillion, leaving the budget legislation on track with room to spare for adjustments, including a cap on state and local tax deductions.
The committee's forecast comes before a Tuesday afternoon meeting, during which the Ways and Means Committee will take up the tax package formally, reported Politico.
Further changes are possible during the meeting, and later when Republicans plan to take the legislation to the House floor.
Last week, the committee had put a $5 trillion price on only a small portion of the plans the Republicans had released.
Republicans hope to match $4 trillion in tax cuts with spending cuts of $1.5 trillion, with the size of the tax cuts being contingent on the amount of spending reductions.
The state and local tax (SALT) deduction cap has been a sticking point in the budget talks. For now, Republicans have proposed a tentative lift on the cap to $30,000 from $10,000, and to create a new income limit for claiming the deduction. Some blue-state Republicans call that plan inadequate.
The deduction cap currently allows taxpayers who itemize deductions to reduce up to $10,000 of property, sales, or income taxes already paid to state and local governments, which allows them to reduce their federally taxable income. The limit applies to tax years from 2018 to 2025 and is set to expire after this year.
The current proposal would allow some of the tax cuts to take effect this year so people will see the difference in tax refunds ahead of the 2026 midterms.
The estimates show the tax cuts will cost $85 billion this year and another $473 billion next year.
Meanwhile, the bipartisan analysis shows that some provisions that have been demanded by President Donald Trump are smaller than expected.
For example, an overtime pay deduction would run for $124 billion over for years, with a plan for tip tax cuts costing $40 billion.
In addition, expanded tax deductions for seniors would cost $71 billion, and breaks for car loan interest would cost $58 billion, according to the analysis.
Meanwhile, the plans for creating so-called "MAGA accounts," or a savings program for children, would cost $16 billion, most of which would come from a pilot program with the government spending $1,000 per eligible child.
The Republicans' plan to expand the Child Tax Credit, meanwhile, would cost nearly $800 million, the analysis found.
Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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