Steel’s bill would save a $12,000 base standard deduction for individuals, $18,000 for heads of household and $24,000 for married tax filers. But those numbers could be higher due to annual inflation adjustments. The standard deduction for the 2023 tax year is $13,850 for individuals, $20,800 for heads of household and $27,700 for joint tax filers.
Permanently expanding the standard deduction could cost more than $1 trillion over a decade, according to a Congressional Budget Office estimate from last May, a price tag that would make it difficult to advance it without offsetting the cuts to other deductions in the tax code. But the proposal gives Republicans a chance to show their dedication to helping the less wealthy.
The standard deduction is used more often by low- and middle-income households, with itemized deductions offering greater benefits for wealthier taxpayers who spend more on things like charitable donations. In 2020, about 95 percent of the standard deduction was claimed by households earning less than $200,000, according to IRS data.
Joining Steel on the bill are fellow Ways and Means Committee Republicans Adrian Smith of Nebraska, David Kustoff of Tennessee, Beth Van Duyne of Texas, Brad Wenstrup of Ohio, Drew Ferguson of Georgia, Mike Kelly of Pennsylvania, Randy Feenstra of Iowa and Carol Miller of West Virginia.
Steel leading the bill is amazing. He is part of a bipartisan SALT caucus including House members that, in one form, issued a $10,000 cap on state and local tax deductions under the 2017 tax law.
