“For decades, Republicans have extolled the virtues of removing loopholes and carveouts from the tax code, arguing it would make the system fairer and more efficient, while allowing for lower overall tax rates.”
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“Trump’s One Big Beautiful Bill is not an exercise in tax simplification.
Instead, it began with a push to extend the party’s 2017 tax cuts — which despite some streamlining also introduced some complexity — and piled more on top, in line with a slew of presidential campaign promises. Add in a heavy dose of congressional politics, and the result was a sprawling and quirky piece of legislation that is distinctively Trumpy: lower taxes and a bigger pile of tax breaks.”
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“several economists I spoke with worried it is the worst of all combinations: increasing the debt to pay for tax breaks that lead to neither growth nor other economically useful outcomes.”
“The popular child tax credit will receive a slight boost from President Trump’s signature tax and spending bill — but there are caveats.
Currently, taxpayers who make under $200,000 annually as a single filer, or $400,000 if filing jointly, can qualify for a partially refundable credit of up to $2,000 for each child they claim as a dependent who is under age 17 and a US citizen or qualifying noncitizen.
The new legislation increases the credit to a maximum $2,200 per child. Without the bill, the maximum credit would have reverted to $1,000.
But the increase, which amounts to a 10% bump, follows years of rising prices that have chipped away at the value of the original benefit. And many extremely low-income children — in addition to US citizen kids of undocumented parents — will be locked out of the payments altogether.”
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“To qualify for the refundable portion of the child tax credit, which is called the “additional child tax credit” and can be worth up to $1,700, taxpayers must earn at least $2,500 in annual income. (A refundable tax credit can lower tax liability past zero, potentially generating a refund.) Families who make less than that receive no benefit, while many more children are in low-income households that earn just enough to receive part of the benefit but not enough to receive the full payment.”
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“The average benefit for taxpayers with children who made between $10,000 and $20,000 in 2022, for example, was $800, according to the Congressional Research Service. That pay range includes people who worked full-time jobs at the federal minimum wage. Families earning between $200,000 and $500,000, meanwhile, saw an average benefit of $2,810.”
“Corporations are betting they will benefit from the legislation making permanent the tax breaks in the 2017 Tax Cuts and Jobs Act.
The package would restore a tax break from the 2017 tax package that allowed businesses to fully write off the cost of equipment in the first year it was purchased. The incentive has been phasing out since 2023.
Also, the legislation would once again allow businesses to write off the cost of research and development in the year it was incurred. The TCJA required that companies deduct those expenses over five years, starting in 2022.”
“If the bill passes, businesses would be allowed to fully and immediately deduct the cost of building new manufacturing facilities. This temporary provision is retroactive to January 19, 2025 and continues for construction that begins before January 1, 2029.
And in a bid to incentivize more chipmaking in America, the legislation would enhance tax credits for semiconductor firms building manufacturing facilities in the United States.”
“The National Federation of Independent Business, the leading small business lobbying group, praised the legislation for making permanent a special deduction for the owners of certain pass-through entities who pay businesses taxes on their individual tax returns.
That deduction, which applies to small businesses and partnerships formed by lawyers, doctors and investors, would get increased in the House version of the bill from 20% to 23%. The Senate bill kept it at 20%.”
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“The net income for the top 20% of earners would increase by nearly $13,000 per year, after taxes and transfers, according to an analysis of a near-final version of the Senate bill by Penn Wharton Budget Model.
That amounts to a 3% average increase in income for those households.
For the top 0.1% of earners, the average annual income gain would amount to more than $290,000, according to Penn Wharton.”
“Employees who work in jobs that traditionally receive tips could deduct up to $25,000 in tip income from their federal income taxes, while workers who receive overtime could deduct up to $12,500 of that extra pay.
However, highly compensated individuals, who make more than $160,000 in 2025, would not qualify.”
“Many people at the lowest end of the income ladder would be worse off because the package would enact historic cuts to the nation’s safety net program, particularly Medicaid and food stamps.
Among the many changes to these programs would be the addition of federally mandated work requirements to Medicaid for the first time in its 60-year history and the expansion of the work mandate in the Supplemental Nutrition Assistance Program, or SNAP, the formal name for food stamps. Parents of children ages 14 and up are among those who would have to work, volunteer, take classes or participate in job training to keep their benefits.
Millions of low-income Americans are expected to lose their benefits because of the work requirements and the bill’s other measures affecting Medicaid and food stamps. Notably, few of those dropped from Medicaid coverage would have access to job-based health insurance, according to a Congressional Budget Office report about the House version of the package.
The health provisions won’t only hit low-income Americans. The Senate is also tightening verification requirements for the Affordable Care Act’s federal premium subsidies, which could also leave some middle-income Americans uninsured.”
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“Hospitals are not happy with the health care provisions of the bill, which would reduce the support they receive from states to care for Medicaid enrollees and leave them with more uncompensated care costs for treating uninsured patients.”
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“The Senate version of the package would increase the deficit by about $3.4 trillion over the next decade, according to CBO.”
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“The CBO expects US federal government interest costs to surpass $1 trillion per year.”
Trump’s big beautiful bill hits Medicaid hard, which provides health insurance for low-income people. The bill adds onerous paperwork requirements that many people will fail to complete. Republicans represent the cuts as getting able-bodied young men back to work, but for Medicaid to save money, it has to no longer pay medical bills, which do not primarily come from able-bodied young men.
“Murkowski..was able to extract key concessions for her state…She won victories on clean energy tax credits, delaying changes to food aid for her state and the promise of massive revenues from oil and gas drilling leases, among other priorities she can take back home.
In the end, she voted for a bill that makes up the core of her party’s domestic agenda.
“I held my head up and made sure that the people of Alaska are not forgotten in this, but I think that there is more that needs to be done, and I’m not done,” Murkowski told reporters immediately after the vote. “I am going to take a nap, though.”
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she ultimately voted for a bill she just minutes later decried as “rushed” and “imperfect.”
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What Murkowski was wrangling for was pretty basic: How to blunt the impact of the bill on her state.
“What I tried to do was to ensure that my colleagues understood what that means when you live in an area where there are no jobs, it is not a cash economy,” she told reporters. “And so I needed help, and I worked to get that every single day.”
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Bowhead whaling boat captains recognized by the Alaska Eskimo Whaling Commission will be able to deduct more for whale-hunting-related expenses, up to $50,000 from the current $10,000.”
Although both parties have been fiscally irresponsible, the Republicans have been more irresponsible, despite talking about it more. The Democrats tend to offset some of their spending with taxes. Republicans just take on debt to pay for wars and tax cuts that mostly benefit the wealthy.
“Tillis — who voted against the bill in a key procedural vote Saturday night and announced Sunday he would not run for reelection — delivered a scathing rebuke of the president’s agenda-setting bill in a Senate floor speech, explaining his position and pledging to withhold his vote unless his concerns about drastic cuts to Medicaid are addressed.
“What do I tell 663,000 people in two years or three years, when President Trump breaks his promise by pushing them off of Medicaid because the funding’s not there anymore, guys? I think the people in the White House … advising the president are not telling him that the effect of this bill is to break a promise,” Tillis said in his floor speech.”
“The administration is using a process known as “rescission” to pursue the cuts, which allows the White House to ask Congress to claw back money it has already approved. The process has not been successfully used in over two decades, and the Senate rejected a rescission request in 2018, during Trump’s first term.
Lawmakers must approve the cuts within 45 days of the request — July 18 — or Trump is required by law to spend the money. The administration has said that this could be the first of several rescission requests.”