On May 12, 2025, House Republicans introduced a 389-page tax bill, dubbed the “One Big, Beautiful Bill,” aligning with President Donald Trump‘s campaign promises. The legislation proposes eliminating federal income taxes on tips and overtime pay through 2028, aiming to increase take-home pay for millions of American workers.
The bill includes provisions allowing individuals to deduct up to $10,000 in overtime earnings from taxable income, with married couples eligible for up to $20,000. These deductions phase out for individuals earning over $100,000 and couples over $200,000.
In addition to tax relief on tips and overtime, the bill seeks to make permanent the 2017 Trump-era tax cuts, increase the standard deduction and child tax credit, and introduce deductions for auto loan interest. However, the proposal maintains the current 37% tax rate for individuals earning at least $2.5 million annually, foregoing a previously suggested increase to 39.6%.
To offset the estimated $4.9 trillion revenue reduction, the bill proposes significant spending cuts, including reductions in Medicaid and green energy programs. These cuts have drawn criticism from some GOP lawmakers concerned about potential impacts on healthcare coverage for millions.
The legislation is currently under review by the House Ways and Means Committee, with Republicans aiming for a vote by Memorial Day. If passed, the bill would represent a substantial shift in tax policy, emphasizing relief for working-class Americans.
