#TrumpTaxCuts President Donald Trump and Republicans in Congress intensify work on a new tax cut package aimed at extending and expanding provisions from the Tax Cuts and Jobs Act of 2017.

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🔑 Key assumptions of the new tax plan

• Extension of 2017 tax cuts: The plan proposes a permanent extension of income tax cuts for individuals and corporate tax breaks introduced in 2017.

• New tax breaks: Additional incentives are proposed, such as the elimination of taxes on Social Security benefits, tips, and interest on car loans.

• Focus on incomes below $200,000: Trump announced that tax cuts will focus on individuals earning less than $200,000 per year, with the possibility of completely eliminating income tax for this group. 

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💰 Impact on the budget and economy

• Cost to the budget: It is estimated that the full extension of the 2017 tax breaks and the introduction of new incentives could increase the budget deficit by about $4.5 trillion over the next decade.

• Proposed spending cuts: To balance the budget, Republicans propose $2 trillion in spending cuts, including Medicaid programs, education, and renewable energy incentives.

• Potential economic growth: Proponents of the plan argue that tax cuts could stimulate economic growth, increase employment, and raise wages, which would partially offset lost budget revenues.

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🏛️ Legislative challenges

• Divisions within the Republican Party: There are internal disagreements among Republicans, particularly regarding cuts to the Medicaid program and the limit on state and local tax (SALT) deductions.

• Opposition from Democrats: Democrats oppose the plan, arguing that it will mainly benefit the wealthiest, increase inequality, and threaten funding for key social programs.