Trump's One Big Beautiful Bill: Who Wins and Who Loses?

Overview of President Trump's One Big Beautiful Bill Act

President Donald Trump’s One Big Beautiful Bill Act is a comprehensive legislative proposal aimed at overhauling tax policies and various federal programs. Spanning an impressive 1,116 pages, this bill has sparked considerable debate regarding its implications for American households. While its potential to reshape federal policies is evident, analyses indicate that the benefits of this legislation may primarily favor higher-income individuals.

The House of Representatives was scheduled to vote on the bill on Thursday. However, progress has been hindered due to demands for additional changes from members of the conservative House Freedom Caucus. While the bill is designed to deliver overall assistance to U.S. households, it is projected that those in lower income brackets could see diminished benefits as a result of proposed spending cuts.

Projected Economic Impact

According to a preliminary analysis conducted by the nonpartisan Congressional Budget Office (CBO) on May 20, the proposed legislation would make the 2017 tax cuts from Trump’s first term permanent. This would involve reductions in certain taxes, alongside increases in others, while also altering federal spending amounts.

Winners of the One Big Beautiful Bill Act

In assessing the potential winners if the bill passes, USA TODAY identified several key groups that stand to benefit significantly:

High-income earners are expected to reap the most rewards from the bill. An analysis by the Tax Policy Center estimates that the bill will reduce taxes by an average of $2,800 by 2026, with over two-thirds of these cuts benefiting individuals earning around $217,000 or more annually. Those with incomes exceeding $1.1 million would receive nearly a quarter of the total tax cuts.

The legislation proposes to increase the child tax credit by $500, raising it to $2,500 through 2028, before reverting to $2,000 thereafter. However, an estimated 4.5 million children may become ineligible due to a new requirement mandating that both parents possess a Social Security number. Additionally, children under 8 will receive $1,000 each to open MAGA savings accounts for growth and investment purposes.

The bill also includes provisions allowing individuals to deduct up to $10,000 in car loan interest payments for purchases of American-made vehicles, incentivizing domestic automotive sales.

Under the proposed legislation, overtime wages would not be subject to federal income taxes. This change could lead to a substantial reduction in federal revenue, estimated between $680 billion and $866 billion from 2025 to 2034, according to a study by the Tax Foundation.

For workers who earn tips, the bill proposes a significant change: tips would not be taxed. The IRS has historically noted that tip income is often underreported, with estimates suggesting that unreported income could reach as high as $23 billion. However, this provision is set to expire after 2028.

Losers of the One Big Beautiful Bill Act

While some groups benefit, others may face significant financial losses:

Individuals earning less than $50,000 annually are projected to face losses, with those making between $17,000 and $51,000 losing about $700 on average. Those earning below $17,000 could see losses exceeding $1,000, primarily due to cuts in federal assistance programs.

Proposed changes to Medicaid could lead to an estimated 7.6 million Americans losing their health insurance over the next decade, with cuts totaling $698 billion. The Supplemental Nutrition Assistance Program (SNAP) may also see a reduction of $267 billion, along with new work requirements for recipients aged 55 to 64.

The bill aims to repeal student loan relief measures instituted by the Biden administration. It would limit repayment plans for federally held loans to just two options and impose strict caps on loans for parents and undergraduate students, effectively eliminating lending options for future graduate students.

The CBO forecasts that the bill could increase the federal deficit by $3.8 trillion from 2026 to 2034, primarily due to tax changes and the extension of existing tax cuts.

Provisions targeting undocumented individuals include increased fees for legal immigration processes. This bill would impose a $1,000 fee for asylum requests and $500 payments for work authorizations every six months. Additionally, it discourages states from utilizing their own funds to provide Medicaid coverage for undocumented children.

In conclusion, while President Trump's One Big Beautiful Bill Act aims to reshape the economic landscape, its implications are complex, with a clear divide between those who stand to gain and those who may face significant hardships.