As implementation work on the One Big Beautiful Bill Act’s many tax provisions continues, the Republican Study Committee (RSC) released its framework for a second reconciliation bill that includes more tax proposals. Meanwhile, Democrats previewed their plan to tackle affordability.
The RSC framework, entitled “Making the American Dream Affordable Again,” includes several previously introduced proposals that either didn’t make it into last summer’s reconciliation package or were cut before final passage. The framework was rolled out by the RSC, the conservative caucus of House Republicans, on January 13. The group aims to tackle housing, healthcare, and energy costs while boosting economic security for Americans.
Tax Proposals to Watch for in Reconciliation 2.0
The RSC is calling for multiple new tax-advantaged savings accounts, including Health Freedom Accounts in place of Affordable Care Act subsidies, Home Savings Accounts to save for a first home, and Residential Emergency Asset Accumulation Deferred Taxation Yield (READY) accounts to save for home mitigation and disaster recovery expenses. Also on the list is Jumpstart Accounts for individuals to save for “apprenticeship education and initial business costs.”
To help businesses, the group proposes a new apprenticeship tax credit. And it takes up a bipartisan goal of extending the now-expired Work Opportunity Tax Credit, meant to incentivize businesses to hire Americans facing barriers to employment. Of particular relevance to small and family businesses, the RSC proposes repealing the “federal death tax” and ending “taxation of inflation” – which would come at a cost of $281 billion and $272 billion, respectively.
On the housing front, in addition to new tax-favored savings accounts, the RSC proposes eliminating capital gains tax on sales of certain homes – namely, sales to first-time buyers and rental homes to tenants. It would also place limits on the Low-Income Housing Tax Credit, including barring non-permanent residents from claiming the credit.
Other proposals also target foreign nationals. The RSC would increase the OBBB’s 1% remittance tax on certain funds sent abroad to 5%. It also would expand the remittance tax to cover “money transferred through electronic funds transfer services and mobile payment apps.” And the RSC calls for further limits on the Earned Income Tax Credit and Child Tax Credit for non-permanent residents.
For families, the group suggests revamping the Child and Dependent Care Tax Credit to support families with a stay-at-home parent and allowing these single-earner families to contribute double to their 401(k) accounts.
Democrat Proposals Coming
The same week, Senator Minority Leader Chuck Schumer (D-NY) described Democrats’ plan for housing affordability – he said to expect the party’s plans to lower grocery, electricity and energy, childcare, and healthcare costs in the coming weeks.
Speaking at a January 15 Center for American Progress event, Schumer explained that the Democrat housing plan, dubbed “Opportunity Starts at Home,” would increase housing stock and home ownership – but also reduce rent. “Republicans aren’t even talking about rental relief at all, but we Democrats actually delivered on rental relief in the past,” said Schumer, reflecting on COVID-era rental assistance and emergency housing vouchers.
He described tax proposals on Democrats’ list of housing reforms, including expanding the Low-Income House Tax Credit and establishing federal tax incentives for converting commercial space to housing.
Schumer admitted that “both parties ignored the decades-long housing crisis,” calling this “a truth we Democrats must confront and own.” But he said that lowering costs, including for housing will be Democrats’ “North Star” in 2026.
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