One Big Beautiful Bill: How Much Could You Save Under Trump’s New Tax Plan?

One Big Beautiful Bill: How Much Could You Save Under Trump’s New Tax Plan) US President Donald Trump’s new tax plan “One Big Beautiful Bill” has become a big topic of discussion in Congress these days. Through this bill, on one hand, taxpayers are expected to get the benefit of a tax cut of 3.7 trillion dollars, while on the other hand, an increase of 2.4 trillion dollars in the country’s deficit is also being estimated in the next ten years. This conclusion has come to the fore in a neutral analysis report recently released by the Congressional Budget Office (CBO).

Main objective of the bill: Tax relief and boosting the economy

This major effort of the Trump administration is being done with the intention of giving direct tax relief to the people of America and giving a new impetus to the country’s economy.

The bill has many attractive provisions:

• Extension of the personal income tax cut
• Tax exemption on tips
• Investment of $350 billion in border security and national security
• Cuts in green energy tax breaks
• New work-requirement rules in Medicaid and SNAP (food stamps)
• But this relief is accompanied by a proposed cut of $1.3 trillion in the country’s federal spending.

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CBO’s analysis: Tax breaks could lead to savings and increased spending

According to the CBO report:

• $3.7 trillion in tax relief would be available over the next decade.
• But the deficit would increase by $2.4 trillion.
• $1.3 trillion in federal spending would be cut.
• 10.9 million people could lose health insurance.
• 8.6 million people would be excluded from health services.
• 4 million people could also be excluded from SNAP (food stamps).

According to this report, the impact of the bill will be mixed – it will prove to be a big economic boon for some sections, while it will pose challenges for others.

Reaction of White House and Republican leaders

The White House and Republican leaders have already been skeptical about the CBO report. White House press secretary Caroline Levitt said that “CBO has been wrong in the past,” and the revenue estimates in the report have been underestimated.

At the same time, Senate Majority Leader John Thune also accused the CBO of underestimating the actual revenue generated from the 2017 tax break.

What is One Big Beautiful Bill?

President Trump himself has described this bill as “One Big Beautiful Bill.” The main objective of the bill is to not only make permanent the personal tax breaks implemented in 2017 but also add new provisions:

Key provisions:

• Extending the 2017 tax breaks
• Tips will not be taxed (a big relief, especially for workers in the hospitality industry)
• $350 billion in border security and national security spending
• Cut in green energy tax breaks
• New work-requirement rules in Medicaid and SNAP, which will reduce spending on these
• Increasing the debt limit of $4 trillion, so that the government can pay old outstanding bills

Potential savings: What will the common citizen get?

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• Personal tax exemption: The middle class and lower income groups will benefit the most.
• Annual tax savings of thousands of dollars is possible depending on the size and income of the family.
• Retail, hotel, restaurant employees will especially benefit greatly from the tax exemption on tips.
• For businesses: Small and medium businessmen will get a big tax relief.
• Green energy related businesses may get a setback.

Negative effects:

• The new Medicaid rule may make it difficult for adults up to 65 years of age to get health services.
• 4 million SNAP beneficiaries may lose food security.
• 10.9 million Americans will be left without health insurance.

Opposition’s response: Big Ugly Bill

• Democrats have criticized this bill by calling it “Big Ugly Bill”. They argue that:
• It gives more benefits to the rich and corporates.
• Protections for the middle class and poor sections are being cut.
• Essential social safety nets like health insurance and food stamps will be weakened.

Financial impact for America

If this bill is passed then:

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• Tax savings will increase consumer spending.
• Investment in border security may increase the government deficit.
• The green energy industry may suffer a setback and green energy development may slow down.
• SNAP and Medicaid cuts will have a negative impact on the poor sections.

Role of CBO: Unbiased Analysis

CBO has been presenting unbiased economic and budget data to Congress for the past 50 years. Although this time the White House has raised questions on its report, CBO releases reports with its more than 275 experts following ethical rules under the law.

Conclusion:

Your savings from the bill One Big Beautiful Bill will depend on which class you fall into. If you are from a middle class family, then you can get a lot of tax relief from this bill. Apart from this, if your income is tip based, such as in hotels, restaurants or retail sector, then you will also get the benefit of tax exemption on tips. Also, small and medium businessmen can get financial benefits through corporate tax exemption. But on the other hand, if you are dependent on government health services like Medicaid, or are a beneficiary of SNAP (food stamps), then this bill may cut down your facilities. Similarly, people working in the field of green energy may also face a negative impact due to this bill, as a cut has been proposed in the green energy tax break. Thus, while this bill will bring financial relief to some, it will also create challenges for some sections.

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Rebecca