5 Major Takeaways From Donald Trump’s Massive Tax Bill

US President Donald Trump secured a massive legislative win on Thursday as Congress passed his ambitious ‘One Big Beautiful Bill’ with a narrow margin.  The newly passed tax and spending bill – passed with a final vote of 218-214 – has sparked intense debate.The landmark bill – Packed with tax cuts, funding for border security and significant changes to social programs – will now head to President Trump’s desk to be signed into law. Here’s a breakdown of the key points you need to know.

1. Big Tax Cuts Extended, Mostly for the Wealthy

The bill makes permanent the tax cuts from President Trump’s 2017 Tax Cuts and Jobs Act, preventing them from expiring at the end of this year. It includes about $4.5 trillion in tax reductions, according to a report published by The Associated Press. 

Key highlights include:

• The child tax credit increases from $2,000 to $2,200 but with limitations for lower-income families.
• New deductions allow taxpayers to write off income from tips, overtime, and auto loans.
• A $6,000 deduction is introduced for older adults earning under $75,000.
• State and local tax (SALT) deductions quadruple to $40,000 but only temporarily for five years.

However, according to the nonpartisan Congressional Budget Office (CBO) analysis cited by the US-based news agency, the wealthiest households could see a $12,000 boost, while the poorest might lose about $1,600 annually, mainly due to cuts in Medicaid and food aid programs.

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2. Massive Spending on Border Security and Deportations

According to the AP report published early Friday, the bill allocates roughly $350 billion to fund Trump’s border agenda, including:

• $45 billion for migrant detention centers and deportation operations.
• Funding to hire 10,000 new Immigration and Customs Enforcement (ICE) agents with signing bonuses.
• Over $50 billion for building new border fortifications, likely including the contentious border wall.
• Trump has called it a way to fulfill his promise of a historic mass deportation campaign.

3. Cuts to Medicaid and Food Assistance

• To offset lost tax revenue, Republicans included sharp cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps.
• New work requirements for Medicaid and SNAP recipients, including older adults up to age 65.
• Proposed $35 co-payments for Medicaid patients.
• CBO estimates over 11 million Americans could lose health coverage by 2034, and three million could lose SNAP benefits, as reported by the AP.

Republicans have argued that these changes target fraud and waste, while critics have warned that they threaten vulnerable populations.

4. Clean Energy Tax Credits Slashed

• The bill rolls back many tax incentives created under President Biden’s climate agenda.
• Tax credits for electric vehicles expire this year instead of 2032.
• Subsidies for renewable energy projects, like wind and solar, have been drastically reduced.

Oregon Senator Ron Wyden criticised the bill as a “death sentence for America’s wind and solar industries,” warning it will increase utility bills.

5. Additional Highlights and Price Tag

The legislation also includes:

• New “Trump Accounts,” a children’s savings program with a $1,000 deposit.
• $40 million funding for the “National Garden of American Heroes.”
• Cuts to university endowment tax breaks and a tax on remittances sent abroad.
• Raises the federal debt ceiling by $5 trillion to avoid default.

Despite Republican claims of fiscal responsibility, the CBO has projected that the bill would add nearly $3.3 trillion to the deficit over the next decade, sparking criticism of “accounting gimmicks” to mask the true cost.

VP Vance Says He ‘Doubted’ The ‘Big, Beautiful’ Bill Would Pass by July 4

Following the passing of the bill, Vice President JD Vance admitted that sometimes he “doubted” that the bill would pass by July 4. “Congrats to everyone. At times, I even doubted we’d get it done by July 4! But now we’ve delivered big tax cuts and the resources necessary to secure the border. Promises made, promises kept!” Vance said on X.

The bill was passed in the US Senate on Tuesday, with a 51-50 vote, with Vice-President JD Vance’s tie-breaking vote.  

The final 51-50 vote followed intense negotiations as lawmakers worked through the weekend before launching a 27-hour marathon of amendment votes on the floor, during which Republican leaders sought to win the support of holdouts, the Hill reported.

According to the report, the huge Republican bill was passed in the senate despite unified Democratic opposition and defections from three Republican senators: Thom Tillis, Rand Paul, and Susan Collins.

(With inputs from The Associated Press, CNN and The Guardian)

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