• The House passed a revised version of President Trump's tax bill after an all-night session, sending it to the Senate.
  • Key compromises include raising the SALT deduction cap and expanding tax breaks for gig workers and small businesses.
  • The bill faces an uncertain path in the Senate, where further amendments are expected.

House Approves Tax Bill After Marathon Session

The House of Representatives voted to pass a revised version of President Trump's tax bill following intense negotiations that stretched into the early morning hours. The legislation, which now moves to the Senate, represents a critical step in the budget reconciliation process, allowing it to bypass the usual 60-vote threshold in the upper chamber.

Speaker Johnson worked tirelessly to secure support from various Republican factions, with a last-minute compromise on the State and Local Tax (SALT) deduction cap proving pivotal. The cap was raised to $40,000 for households earning up to $500,000, a move that helped win over GOP representatives from high-tax states.

What's in the Bill?

The revised legislation makes permanent key provisions of the 2017 Trump Tax Cuts that were set to expire, while introducing new measures like an increased Child Tax Credit of $2,500 through 2028. It also eliminates the controversial $600 threshold for 1099-K reporting, a win for gig workers and small businesses that rely on payment platforms.

One notable addition is a tax break on tips for gig workers, a provision championed by industry leaders like DoorDash CEO Tony Xu. "This recognizes the hard work of millions of delivery drivers," Xu said in a statement. The bill also includes a $4,000 deduction for seniors and expands pass-through deductions for small businesses.

Political Hurdles Remain

While the White House has strongly endorsed the bill - with the Office of Management and Budget warning that failure to pass it would be "the ultimate betrayal" - its Senate prospects remain uncertain. Majority Leader John Thune acknowledged that the upper chamber will likely put its own "imprint" on the legislation.

Advocacy groups like Americans for Prosperity are pushing hard for passage, arguing that without action, Americans face "the largest tax hike in history." But with differences between House and Senate reconciliation approaches, the final form of the bill remains very much in flux as it moves to the next stage of the legislative process.