Permanent Tax Cuts for American Families Act of 2025

Permanent Tax Cuts for American Families Act of 2025 would permanently raise the standard deduction and adjust it for inflation. The bill, introduced in the House in January 2025 and sponsored by Rep. Miller of Ohio with several co-sponsors, would replace the current standard deduction amounts described in Section 63(c)(2) of the Internal Revenue Code with much higher figures: $18,000 in one category and $12,000 in another. It also updates the inflation-adjustment mechanism (COLA) so these amounts, and other related figures, rise automatically in future years using the specified baselines (2017 for the first pair, 1987 for another, and 1997 for a third) and rounding rules. The changes are intended to apply to taxable years beginning after enactment. The bill also includes a conforming amendment that removes paragraph (7) of Section 63(c). In plain terms, the bill would dramatically increase the portion of income that is not taxed for filers who take the standard deduction, and it would automatic adjust those amounts for inflation going forward. This is designed to be a permanent policy change rather than temporary, and it would reduce the incentive for some taxpayers to itemize deductions. The exact revenue and distributional effects depend on how many taxpayers switch from itemizing to the larger standard deduction and on future inflation, as determined by the bill’s COLA formula.