By Richard Rubin and Danny Dougherty

Republicans are trying to get a fiscal bill through the House this week. It's a complex piece of legislation that includes tax cuts, spending increases, spending reductions and some tax hikes. In total, it would increase budget deficits by nearly $3 trillion over a decade.

Here are some key proposals as the bill now stands that both reduce and add to overall spending and taxes.

Extension of tax cuts

Unless Congress acts, marginal income-tax rates will increase in 2026. The bill continues the current rate structure, with a top rate of 37%. Tax bracket thresholds would get extended, too, with an extra adjustment in 2026 that would increase take-home pay.

Child tax credits

The bill keeps the expanded $2,000 child tax credit created by the 2017 tax law. It temporarily -- for 2025 through 2028 -- bumps that per-child amount up to $2,500. It then returns to $2,000 and gets indexed to inflation. The bill would extend but not increase the refundable portion of the credit that goes to low-income households.

Cap on state and local tax deduction

This year, taxpayers can't deduct more than $10,000 in state and local taxes. That limit would disappear if Congress does nothing, so the bill raises money by imposing a cap. The current proposal is a looser limit of $30,000, which starts phasing down when income reaches $400,000.

Repeal EV credit

Tax credits for purchasing commercial and used electric vehicles would end after this year. Credits for new EVs would largely end too, but some manufacturers' models could still qualify in 2026.

Repeal personal and dependent exemption

The bill would continue a key change that Congress made in 2017. Each tax return used to include a per-person exemption for every member of a household. The bill would keep the new structure, which has a higher standard deduction and child tax credits and ends exemptions.

Medicaid

The bill would require Medicaid recipients to work or volunteer, clamp down on states' use of special arrangements known as "provider taxes" to pay their share of Medicaid costs, require more checks to make sure those on Medicaid are still eligible, and reduce funding to states that offer coverage for immigrants in the country illegally.

SNAP

The House GOP bill aims to cut around $300 billion largely through changes to the Supplemental Nutrition Assistance Program, or SNAP, which provides food aid to low-income households. The bill tightens the existing work requirements for the food aid program by raising the age of able-bodied people who must work at least 80 hours a month to receive SNAP benefits to 64, up from 54. Currently, able-bodied, low-income people between the ages of 18 and 54 can receive food assistance for no more than three months within a three-year period unless they are working or enrolled in a work program.

Write to Richard Rubin at richard.rubin@wsj.com and Danny Dougherty at danny.dougherty@wsj.com

(END) Dow Jones Newswires

May 20, 2025 05:00 ET (09:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.