Trump's proposed legislation, dubbed the "big, beautiful bill," includes the repeal of several taxes.
The "One Big Beautiful Bill," currently in the Senate, aims to make President Donald Trump's 2017 tax cuts permanent, cut other taxes, and ramp up spending for border security and defense. However, the bill is a point of contention among Republican fiscal hawks who warn it will add $2.4 trillion to the deficit.
Let's take a closer look at the proposed tax cuts:
- Making Trump tax cuts permanent: This extension of 2017 cuts would leave the average taxpayer's taxes largely unaffected unless the cuts weren't renewed.
- No tax on tips and overtime: Trump promised to exempt workers earning tips from federal income taxes on them (up to $160,000 annually), as well as offer the same relief for overtime pay, with no cap on OT pay claims. Both tax breaks expire in 2028.
- Trump savings accounts: The bill creates accounts for parents to save for their newborn children, with a $5,000 annual contribution limit and an initial $1,000 deposit per baby.
- Raising the SALT cap: The bill raises the state and local tax deduction limit for those earning less than $500,000 annually, with the cap increasing by 1% each year.
- Removing gun silencer tax: The bill plans to end the $200 excise tax on silencers and eliminate registration, a major win for the National Rifle Association.
- Repealing tax on indoor tanning: The legislation aims to repeal the 10% tax on indoor tanning services imposed by the Affordable Care Act.
- Cuts to green energy incentives: The bill could reduce or eliminate green energy tax credits and incentives, as seen in the Inflation Reduction Act.
The bill also deems education programs for a significant overhaul, potentially slashing $330 billion from student loan spending over the next decade. The Pell Grant program for low-income students may also face changes.
Stay tuned as the Senate deliberates on the bill's potential impact on Medicare, Supplemental Nutrition Assistance Program (SNAP), and other programs.
-our team: John Parkinson, Allison Pecorin, Arthur Jones II, and Isabella Murray contributed to this report.
FURTHER INSIGHTS:
- The bill's proposed tax cuts could save families as much as $13,300, and individuals earning between $30,000 and $80,000 might see a 15% decrease in their tax bills[2].
- On the other hand, the bill is projected to increase the federal budget deficit by approximately $2.6 trillion over the next decade[1].
- The "One Big Beautiful Bill" under consideration in the Senate includes proposed changes to education programs, potentially leading to substantial reductions in funds allocated for student loans and the Pell Grant program for low-income students.
- Amidst the debate over the bill's potential effects, it is important to note that the proposed tax cuts could provide significant savings for families, with a potential reduction of up to $13,300 for some families and a 15% decrease in tax bills for individuals earning between $30,000 and $80,000.
- Conversely, the bill's projected impact on the federal budget deficit is a point of contention, with estimates suggesting an increase of approximately $2.6 trillion over the next decade.
- The proposed tax bill has far-reaching implications for various sectors, including business, finance, politics, and general news, as it touches upon a wide array of issues such as education, green energy incentives, and gun control measures.
