Donald Trump bill will spike top tier wealth, destroy healthcare for poor person and raise deficit by $3 trillion.
On July 3 US house of Rep. passed Donald Trump signature tax decrease and spending package which he called the One Big Beautiful Bill.
Trump tax bill
The bill combines tax cut, spending hikes on border security and defence and cuts to social security nets.
Trump will sing the bill into law on Friday July 4 the US independence day at 4 pm ET.
Democratic Minroity leader Hakeem Jeffries threat that bill hurts everyday Americans and rewards billionaire with massive tax breaks.
Trump ally billionaire Elon Musk publicly opposed the bill arguing it would bloat expenditure and country unmatched debt.
Who will benefit the most?
According to Yale University Budget Lab wealthier taxpayers are seem to gain more from this bill than lower income Americans.
They estimate that people in lowest income bracket will see their income down b 2.5 per cent because of decreast to SNAP and Medicaid while highest earners will view their income spike by 2.2percent.
How did the House of Representatives vote on the bill?
212 democratice members of the House opposed the bill, They were joined by Rep. Thomas Massie of Kentucky and Brian Fitzpatrick of Pennsylvania who broke from Republican majority.
The lower house of US congress voted by margin of 218 to 214 in favour of bill on Thursday
Trump tax bill
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How have taxes been decreased?
The important aim of bill was to extend Trump first term tax decreases.
In 2017 Trump singed Tax cuts and jobs act which lowered taxes and increased deduction for all taxpayrs benefitting higher income earners.
Over a third of total decrease went to household with income of $460,000 or more.
The top 1 percent gained average tax cuts of about $61,090 by 2025 higher than any income group.
By contrast the middle 60 percent of earners saw cuts in range of $380 to $1800.
Those tax breaks were set to expire this year but latest bill had made them permanent.
It add more decrease Trumps promised during latest campaign.
Thos will let taxpayers deduct few local taxes from federal tax return.
People can only deduct upto $10,000 of these taxes. The latest bill would spike that cap from $10,000 to $40,000 for five years.
Taxpayers will allowed to deduct income earned from overtime and tips until 2028.
Legislation involve about $4.5 trillion in tax cuts.
The estate tax exemption will spike to $15m for individuals and $30m for married pairs.
Will there be latest amount for national safety?
The bill sets aside about $350bn to spread out over multiple years for Trump border and national safety plans.
This consist of
- S45bn to fund 100,000 beds in migrant detention centres.
- $46bn for US Mexico border wall.
- Billions more to hire an extra 10,000 immigrationa nd Customs Enforcement ICE agents by 2029.
Trump tax bill
Trump Big Beautiful Bill Passes US House
Only two House Republicans voted no to Trump domestic policy bill.
On July 1 the Senate passed the bill by 51-50 vote with deciding vote caste by VP JD Vance.
How will the bill affect the US debt profile?
The legislation would raise debt ceiling b $5 trillion from $36.2 trillion going beyond the $4 trillion outlined in version passed by House in May.
Washington cannot borrow over its stated debt ceiling. Since 1960 Congress has spiked suspended or altered the terms of debt ceiling 78 times facilitating more leverage and undermining the US long term fiscal stability.
Debt as share of GDP was higer past year than it was anytime outside of WWII the aftermath of 2008 financial crisis or COVID-19 pandemic.
Deficit worries contribute to Moody downgrading of US credit score in May.
The White House claims new tax bill will cut protected defictis by over $1.4 trillion over next ten year.
Will clean energy be affected?
Republcians have rolled back tax incentive sthat help clean energy projects powered by renewables like wind and solar instead giving tax break to oil companies and coal.
These green tax breaks were part of President Joe Biden landmark Reduction Act which aimed to tackle climate change and decrease healthcare costs.
A tax break for people who purchase new or used electric cars will expire on September 30 this tear. instead of at end of 2032 under current law.
How mega are social welfare decreases?
To assit offset the cost of tax outs Republicans plan to scale back Medicaid and food assistance programmes for low income families.
Their stated goal was to focus these programmes on groud primarily pregnant women people with disabilities and kids while reducing what they look to be waste including by limited reach to immigrants.
The CBO estimates that 4.7 milion SNAP participants will lose out over 2025-2034 time period due to program decreases.
Trump tax bill