President Donald Trump hailed the passage of what he called a “big, beautiful bill,” claiming it will go down as one of the most successful laws in U.S. history. But while the sweeping legislation offers major gains for corporations and high earners, critics warn it could worsen conditions for low-income Americans and strain the country’s finances.
Business leaders celebrated the package, which makes permanent key provisions of the 2017 tax overhaul. Companies will once again be able to fully deduct equipment and research costs in the year they are incurred. Manufacturers will also benefit from new deductions tied to factory construction, including incentives for domestic semiconductor production. Small businesses and partnerships welcomed the extension of a tax break for pass-through income, with some owners seeing a boost in their deductions.
High-income households are poised to benefit significantly. A Penn Wharton analysis projects nearly $13,000 in additional annual income for the top 20%, and more than $290,000 for the wealthiest 0.1%. Americans in high-tax states will temporarily enjoy higher limits on deductions for state and local taxes.
Workers who rely on tips or overtime pay will also receive a limited benefit. Through 2028, those earning within set thresholds can deduct a portion of their tip or extra earnings from federal taxes. However, other groups will face setbacks under the new law.
The legislation enacts historic cuts to Medicaid and food assistance, adding work requirements and tightening eligibility. According to the Congressional Budget Office, millions could lose benefits as a result. Low-income families earning under $18,000 per year are expected to see their net income decline by over 1%, while hospitals fear a rise in uninsured patients and uncompensated care. A $50 billion fund for rural hospitals is viewed as insufficient by industry leaders.
The clean energy sector faces setbacks as well. While the Senate removed a proposed tax on wind and solar, the final bill phases out key renewable energy credits by 2027. It also ends the $7,500 federal tax incentive for electric vehicles this fall, five years earlier than previously planned.
Fiscal conservatives are raising red flags over the cost of the package. The Congressional Budget Office estimates the bill will add $3.4 trillion to the national debt over the next decade. Interest payments on the federal debt are projected to top $1 trillion annually, outpacing even defense spending.
Despite the deep divisions, the bill is expected to be signed into law by the president in the coming days. Its long-term impact remains uncertain, but for now, the White House is touting it as a major policy win.
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