(NEXSTAR) – President Trump’s significant tax reform bill brings about changes impacting various groups of Americans, notably parents and guardians.
If Trump manages to convince Republican skeptics and push the 1,116-page bill through as it stands, child tax credit recipients will receive some positive news. They would benefit from a temporary $500 increase, raising the credit to $2,500 per child.
The bill also includes additional tax breaks, such as a temporary $2,000 boost to the standard deduction, bringing it to $32,000 for joint filers.
Furthermore, the Trump administration seeks to follow through on a campaign promise not to tax tips, overtime and interest on some auto loans.
‘MAGA’ kids $1,000 savings accounts
“MAGA” is shorthand for Trump’s signature line, “Make America Great Again.” But in this case, it means “Money Accounts for Growth and Advancement.”
Additionally, for parents or guardians who establish new “MAGA” accounts for their children, the federal government will provide $1,000 for babies born between January 1, 2024, and December 31, 2028.
Families could add $5,000 a year, with the account holders unable to take distributions before age 18. Then, they could access up to 50% of the money to pay for higher education, training and first-time home purchases. At age 30, account holders have access to the full balance of the account for any purpose.
‘Beautiful’ bill faces narrow path
Democrats stand opposed to the package, with its sweeping tax breaks and cuts to Medicaid, food stamps and green energy programs, making GOP unity crucial for Trump.
A small number of House Republicans have declined to back the bill while calling for even deeper cuts to Medicaid and a higher limit for deductions tied to state and local taxes.
Cuts to various federal programs are necessary, some opposing GOP House members say, to offset the impact of the multitrillion-dollar package on the country’s $36 trillion debt. Discussion of further cutting back social safety nets has drawn fierce opposition from Democrats.
“They literally are trying to take health care away from millions of Americans at this very moment in the dead of night,” said House Democratic Leader Hakeem Jeffries of New York.
During a more than hour-long session Tuesday, Trump warned Republicans not to touch Medicaid with cuts, and he told New York lawmakers to end their fight for a bigger local tax deduction, reversing his own campaign promise.
The president, heading into the meeting, called himself a “cheerleader” for the Republican Party and praised Speaker Mike Johnson. But he also criticized at least one of the GOP holdouts as a “grandstander” and warned that anyone who doesn’t support the bill would be a “fool.”
Yet it was not at all clear that Trump, who was brought in to seal the deal, changed minds.
“We’re still a long ways away,” said Rep. Andy Harris, R-Md., the chair of the House Freedom Caucus.
The Associated Press contributed to this report.
