Context:

President Donald Trump’s sweeping tax plan, part of his 'big, beautiful bill,' is set to be debated in a high-stakes meeting between Democrats and Republicans. The legislation aims to eliminate taxes on tips and overtime pay and permanently extend the 2017 Tax Cuts and Jobs Act, with House Speaker Mike Johnson pushing for its passage by Memorial Day. Democrats argue the bill benefits the wealthy at the expense of low-income Americans, adding $5 trillion to the national debt, while Republicans claim it supports working families and small business owners. The House Ways & Means Committee will meet to discuss the nearly 400-page bill, which also proposes increasing the Child Tax Credit and taxing large universities at higher rates. The bill must pass both the House and Senate in identical form to be signed into law by President Trump.

Dive Deeper:

• The House Ways & Means Committee is advancing a major tax reform bill that includes eliminating taxes on tips and overtime pay, and extending the 2017 Tax Cuts and Jobs Act permanently. This legislation is part of President Trump's campaign promises and is touted as beneficial for working and middle-class families.

• House Speaker Mike Johnson has set a goal for Republicans to pass their version of the tax bill by Memorial Day, using the budget reconciliation process to bypass Democratic opposition by requiring only a simple majority for passage in the Senate.

• The bill proposes increasing the Child Tax Credit from $2,000 to $2,500 and boosting the maximum deduction for qualified business income from 20% to 22%, which is expected to benefit small business owners.

• Democrats are preparing to challenge the bill, arguing it disproportionately favors the wealthy while cutting essential programs for low-income families, and could add $5 trillion to the national debt. They cite provisions that reduce healthcare access for working people and future financial burdens.

• The legislation also targets large universities with higher excise taxes on their investment earnings, raising the rate from 1.4% to as high as 21% for institutions like Harvard and Yale, as part of a broader critique of these schools' free speech policies.

• The bill is part of a larger legislative framework that includes contributions from 10 other House committees, covering areas like Medicare, Medicaid, energy, and food assistance programs, all of which must be reconciled into a final version to be approved by both legislative chambers.

• To become law, the tax plan must pass both the House and Senate in identical form, requiring careful coordination among Republicans and potentially contentious negotiations with Democrats who remain strongly opposed to the current draft.