Tax Implications of Trump’s Big Beautiful Bill are Good for Most Americans

As expected, the mainstream media is having fits over the adoption of Trump’s Big Beautiful Bill (BBB). They sound a lot like they did back in 2017 when they vehemently opposed Trump’s Tax Cut and Jobs Act (TCJA).

Their two major complaints are that the BBB will:

• End Medicaid as we know it because of Draconian restrictions and reductions
• Be another scheme to provide tax cuts for the rich.

Both complaints are unfounded.

MEDICAID

When it comes to the upcoming cuts in Medicaid, a closer look reveals that they fall into three categories, all of which are designed to save taxpayer money and make the system more efficient and accountable:

1. It makes it more difficult for illegal aliens to collect Medicaid benefits, without affecting U. S. citizens and lawful residents.
2. It requires able-bodied recipients to either work or participate in other productive activities to help contribute to society’s wellbeing. Those who are able to work and are idle or work for cash to game the system are not worthy recipients of Medicaid.
3. It strengthens the process to determine qualification, to help avoid unlawful use of the system.

Those who remember the 1990’s will likely recall the successful efforts of then president Clinton to streamline the Welfare program in a manner similar to what Trump is doing with Medicaid.

TAXES

The most significant portion of the BBB is what it does with the amount of taxes that Americans are paying. It will benefit everyone who pays taxes, not just the wealthy

At the end of 2025, we are facing a huge tax increase at the federal level. The opinions of news gurus’ notwithstanding, when a tax relief program expires, it is in fact a tax increase. The main purpose of the BBB is to head off this looming tax increase. The following figure lists the basic provisions that would have expired had Trump and Congress not taken action.

A good way to put in perspective what the tax rates were before 2017, and how the TCJA benefitted all taxpayers, is to look back at the changes that took place in 2017. Had it not been for the BBB. We would be going back to the pre 2017 rates at the end of 2025.

There is more to the tax provisions of the BBB than what these charts illustrate. In a recent article, The Hill points out that the wealthiest tax payers get the greatest benefit, which makes a lot of sense. Those who pay more taxes will naturally benefit the most from tax reductions.

The following material was compiled by The Hill to illustrate that the wealthy get a bigger break, but it also illustrates that everyone gets a tax break under the BBB.

INCOME RANGE ($)	AFTER TAX INCOME RISE (%)	AFTER TAX INCOME RISE ($)
318,000 – 460,000	3.1	8,900
217,000 – 318,000	2.6	5,400
100,000 – 200,000	2.5	3,000
75,000 – 100,000	2.3	1,700
50,000 – 75,000	2.2	1,000
40,000 – 50,000	2.1	630
< 40,000	0.8	150

Naturally, these are only rough estimates, but they do provide some sense of how each income group will benefit from the upcoming tax relief.

There is more to the BBB than merely extending lower tax rates that were established in 2017. The BBB includes some new provisions that were not in the 2017 Act, and a few preexisting ones that are being modified. Here is a list of some of the major ones.

Standard Deduction	Permanently increases to Single – $15,750 House of Household – $23,625 Joint – $31,500
Child Tax Credit	Permanent increase to $2,200 per child
Mortgage Interest Deduction	Makes the $750,000 limit permanent
Excise Tax on remittance transfers	This is a tax increase, but one that many believe is justified It imposes a 1 % excise tax on remittance transfers by individuals to foreign recipients
No tax on tips (for 3 years)	Limits benefit to $25,000 per tax payer
No tax on overtime (for 3 years)	Limits benefit to $12,000 per taxpayer
Additional standard deduction for seniors (for 3 years)	Temporarily adds $6,000 bonus for taxpayers 65 and older
Increases the State And Local Tax deduction cap	Temporarily increases the SALT cap from $10,000 to $40,000. Reverts back to $10,000 in 2030

As is the case with most large bills, it will be a while before we have a good handle on everything that is in it. Also, there is the possibility that some tweaking will take place along the line. It will be interesting to follow these developments.