By Joe Light

Congress is beginning to home in on what tax cuts will and won't appear in legislation to extend the individual reductions passed during President Donald Trump's first term. Some of the provisions that have emerged so far are surprising.

The House Ways and Means Committee has released a draft of the tax provisions in the new bill and plans to vote on it as soon as Tuesday. It is still subject to revisions by the committee, in the full House, and before it is potentially passed by the Senate, but the initial draft still provides a general guide to what tax cuts might make it to the final version.

A significant factor working in the bill's favor is that the Joint Committee on Taxation, the official scorer for tax bills, says that the provisions as written would cost $3.7 trillion in lost revenue over a decade. That is well within the $4.5 trillion limit that Republicans set for themselves and potentially gives room for further cuts as the bill progresses.

Here are four significant points from the draft.

Many Trump Campaign Promises Made the Cut, Sort Of

During the campaign, Trump promised that the extension of his 2017 bill would eliminate taxes on tips, overtime, and Social Security. He has reiterated that promise since then, as recently as Monday of this week, and the House draft bill does deliver on it, albeit in a limited form.

The bill eliminates taxes on tips and overtime through 2028, the end of Trump's term, retroactive to the beginning of this year. But the tax break on tips is limited to workers in industries that typically receive gratuities already and is subject to a $160,000 income limit.

Rather than give a direct tax break on Social Security income, the bill increases the standard deduction for taxpayers age 65 and older by $4,000. The break phases out for married couples making more than $150,000 ($75,000 for individuals) and also expires after 2028.

The SALT Cap Increases to $30,000

The bill increases the limit on deductions for state and local taxes to $30,000 from the current $10,000. The deductions would begin to phase out when a household's income passes $400,000.

The vast majority of Americans don't itemize their taxes, but the new cap could provide some relief for Americans in high-tax states, such as New York, California, and New Jersey.

Still the proposed cap is much less than what has been sought by GOP lawmakers from those states. They make the point that under current law, the SALT cap would go away completely in 2026. Those members of Congress have sought a cap that is more than four times as big and have said they are willing to kill the bill if they don't get it.

Green-Energy Breaks Are on the Chopping Block

To raise money, Republicans are seeking to kill green-energy-related tax breaks created when Democrats controlled Congress and the White House. That includes eliminating tax credits for buying electric vehicles from most manufacturers.

The bill would also eliminate tax credits for businesses that invest in or produce renewable energy and those that make batteries, starting in 2031.

New 'MAGA' Accounts for Savings

Among the surprise inclusions is a plan to create a new tax-advantaged "money account for growth and advancement" for children born between 2025 and 2028. The government would fund the accounts with $1,000 for children born during those years. Families could contribute up to $5,000 extra annually.

Write to Joe Light at joe.light@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 13, 2025 11:35 ET (15:35 GMT)

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