“The One Big Beautiful Bill Act”
There are major changes coming for Americans’ finances, after the House of Representatives passed a landmark tax and spending bill at the centre of President Donald Trump’s domestic agenda.
House Republicans passed the legislation Thursday in a 218-214 vote along party lines. The Senate passed it in 51-50 vote two days earlier. Trump’s signature is the last thing needed to usher in the changes that many people will start seeing early next year.
The bill is permanently etching lower income-tax rates into the tax code and averting a widespread 2026 tax hike, when the 2017 tax cuts from Trump’s first term were supposed to expire.
But the bill is about more than tax cuts, and its myriad provisions mean that some Americans will benefit from the legislation while others will lose out. For a law Trump calls the “One Big Beautiful Bill,” the beauty may be in the eye of the beholder.
THE WINNERS
Taxpayers eyeing their bottom line (especially wealthy ones)
In promoting the bill, the White House and Republican leaders emphasized the wins for everyday Americans. The widely used standard deduction is becoming more generous, along with the child tax credit. There are new deductions for tips, overtime and other expenses that will add to the ways many Americans can cut their taxable income.
The full force of taxes and predicted economic growth would boost annual take-home pay up to roughly $10,000 for a family with two kids, according to the White House.
But there’s also the value of provisions like a permanently higher estate tax, generous business expensing and partnership accounting rules that all help richer taxpayers.
Tipped workers
The nation’s 4 million tipped workers are getting a deduction worth up to $25,000 in a win for hairdressers, bartenders and waiters, among others. The tax break runs from 2025 from 2028, meaning people could start taking the deduction on the 2025 taxes they file next tax season.
More than a third of the nation’s workers relying on tips had incomes so low, they didn’t have to file an income-tax return in 2022, while only 4% of workers earning less than $25 an hour received tips.
Workers with overtime pay
The break on overtime could save workers between $1,400 and $1,750 per year, according to the White House Council of Economic Advisers. It runs from 2025 to 2028.
Workers who earn regular overtime pay, like nurses, firefighters and construction workers, also stand to benefit from the bill’s tax provisions. It’s a sliver of the workforce, with 8% of hourly workers and 4% of salaried workers conceivably qualifying for the deduction, according to the Yale Budget Lab.
Car buyers for American vehicles
Car buyers will gain a deduction up to $10,000 on their auto loans, applying to the interest paid on loans for new vehicles assembled in the U.S.
The tax break is available for loans through 2028, but it’s limited to new cars.
Homeowners (living in high-cost states)
Homeowners are getting more firepower to write off their state income taxes and local property taxes. After much wrangling, the state and local tax (SALT) deduction is going to at least $40,000. It will drift higher with inflation through 2029 before tumbling back to $10,000 in 2030.
Senior citizens — but in the short term?
People ages 65 and up are getting a $6,000 deduction, in a nod to Trump’s campaign pledge to end taxes on Social Security benefits. The tax break coming to seniors technically isn’t excluding their benefit money from taxes, due to the budget rules lawmakers had to follow.
It’s a short-term win with a tax break that runs from 2025 to 2028.
THE LOSERS
People relying on the social safety net
Social programs like Medicaid and the Supplemental Nutrition Assistance Program are getting tighter eligibility rules and more verification requirements.
Almost 12 million more people will be without health insurance by 2034, according to the nonpartisan Congressional Budget Office’s tally of the bill. An earlier CBO estimate put the number at 16 million.
Democrat criticism is a scare tactic, Republican leaders say. No one who really needs public assistance will lose it, they say, and work requirements are worth adding to promote work and prevent benefit misuse, they say. Still, the Medicaid changes and their possible fallout have been enough to concern some GOP members. Sen. Thom Tillis of North Carolina voted against the bill due to parts of the Medicaid changes.
Deficit hawks, and consumers hoping for lower interest rates
The bill’s other main flash point was its price. The bill raises the debt ceiling by $5 trillion, coming at a time when national debt exceeds $36 trillion. Deficit critics on Capitol Hill slammed the bill.
A bond’s price and its yield move in opposite directions. If the Treasury Department issues more debt to finance government operations and buyers aren’t willing to buy as much, that would lower the price of government debt and raise its yields — which would raise consumer borrowing costs.
Wealthy universities and student-loan borrowers
An excise tax on private university endowments is becoming steeper. The excise tax tops out at 8% for universities with a per-student endowment value of $2 million or more, but constitutes a significant increase from the current, flat rate of 1.4%.
Car buyers for electric vehicles
The legislation is tough news for Americans who want to buy electric vehicles. The bill eliminates a $7,500 tax credit for the purchase or lease of new EVs, as well as a $4,000 credit for used EVs. Those are just some of the clean-energy tax breaks fading fast under the legislation.
Copyright © 2025 Coastline Private Wealth, All rights reserved.
