On April 5th and April 10th, respectively, the Senate and House approved the FY25 budget resolution, thereby opening the budget reconciliation process and paving the way to enact President Trump's various tax proposals, including extending the expiring TCJA tax provisions. As previously discussed here and here, the House and Senate were divided over whether to enact a two-phase budget bill, which would address tax cuts in a subsequent phase, or enact a single budget bill inclusive of tax cuts. The budget reconciliation process facilitates enacting a single budget bill, inclusive of tax cuts, as the bill would now require only a simple majority in both the House and Senate.
However, before any tax legislation can become law, the Senate and the House must agree on identical tax legislation. While specific tax legislation has not yet been released, the budget resolution contemplates significant tax cuts. The budget resolution both (i) instructs the House Ways and Means Committee to draft tax legislation resulting in $4.5 trillion of net tax cuts over the next 10 years inclusive of the costs of extending the TCJA's expiring tax provisions, and (ii) instructs the Senate Finance Committee to draft tax legislation resulting in $1.5 trillion of net tax cuts over the next 10 years in addition to the costs of extending the TCJA's expiring tax provisions. Congress could begin considering specific tax legislation as early as the end of this month, when it returns from recess.
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