President Donald Trump hopes to sign into law “one, big, beautiful bill” that would extend the Trump Tax Cuts and Jobs Act, unleash energy development, and slash spending.
Trump on Friday called on Republicans to unite behind the “ONE, BIG BEAUTIFUL BILL.”
He wrote on Truth Social:
Republicans MUST UNITE behind, “THE ONE, BIG BEAUTIFUL BILL!” Not only does it cut Taxes for ALL Americans, but it will kick millions of Illegal Aliens off of Medicaid to PROTECT it for those who are the ones in real need. The Country will suffer greatly without this Legislation, with their Taxes going up 65%. It will be blamed on the Democrats, but that doesn’t help our Voters. We don’t need “GRANDSTANDERS” in the Republican Party. STOP TALKING, AND GET IT DONE! It is time to fix the MESS that Biden and the Democrats gave us. Thank you for your attention to this matter!
Taxes
The legislation would extend Trump’s 2017 Tax Cuts and Jobs Act that were set to expire at the end of the year and increase the inflation adjustment for all tax brackets, including the 37 percent threshold.
The Tax Cuts and Jobs Act reduced marginal tax rates for most individual income tax brackets, increased the standard deduction, and it also limited the itemized deduction for total state and local taxes (SALT) to $10,000 annually.
The One, Big, Beautiful Bill would raise the SALT deduction to $30,000 to appease Republicans in New York, New Jersey, and California. They want a higher threshold than $30,000, but it remains unclear if they will get a higher SALT deduction in the bill.
As Breitbart News reported, the SALT deduction mainly benefits wealthy households in Democrat states such as New Jersey, New York, and California.
By extending the Trump tax cuts, it would prevent the average taxpayer from a 22 percent tax hike. The House Ways and Means Committee said the bill would increase take-home pay for a median-income household with two children by roughly $4,000 to $5,000, and it would raise annual real wages by $2,100 to $3,300 per worker.
The legislation would fulfill Trump’s promise to end taxes on tips, overtime pay, and car loan interest, and provide tax relief for seniors.
The Trump tax cuts doubled the child tax credit from $1,000 to $2,000; the legislation now under consideration would increase the tax credit from $2,000 to $2,500 per child until 2028. After 2028, the child tax credit returns to $2,000 and will be indexed to inflation.
Other tax and financial changes include:
- Increasing the adoption credit to $5,000 and indexing it to inflation
- Creating a Money Accounts for Growth and Advancement (MAGA) accounts for parents to open for children under the age of eight years old. Parents can contribute up to $5,000 per taxable year, with preferential tax treatment when spent on higher education, post-secondary credentialing expenses, small business loans, and first-time home-buying.
- The MAGA accounts would provide up to a $1,000 one-time transfer into MAGA accounts for children born between 2025 and 2028.
- Increases the university endowment tax and subjects the largest endowments to the corporate tax rate
- Increases taxes on large nonprofits that resemble hedge funds and pay their employees large salaries
Health Care
The bill seeks to root out waste, fraud, and abuse in Medicaid by having those on the program verify eligibility in the program twice per year instead of the standard one time per year. It would also include “community engagements requirements” of at least 80 hours per month. This includes work, education, or service for able-bodied adults without dependents.
Democrats decried this as “shameful” even though Sen. Chuck Schumer (D-NY), then-Vice President Joe Biden, and Sen. Dick Durbin (D-IL) have voiced support for rooting Medicaid of waste, fraud, and abuse.
One study found that Medicaid has doled out $1.1 trillion in improper payments over the last decade.
The bill would also reduce the Federal Medical Assistance Percentage (FMAP), which is used to allocate the matching rate the federal government grants to states, from 90 to 80 percent for states that provide coverage to illegal aliens.
The program would overhaul the Supplemental Nutrition Assistance Program (SNAP), otherwise known as the food stamp program. It would:
- Increase the state share of administrative costs from 50 to 75 percent. In 2028, states must cover five percent of SNAP allotments. States with higher SNAP error rates would face increased cost-sharing of up to 25 percent
- Work requirements for able-bodied adults without dependents to provide at least 20 hours of work per week
- Requires updates to the Thrifty Food Plan to be cost-neutral. The Thrifty Food Plan estimates the cost of groceries to set SNAP benefit levels
- Mandates all states participate in the National Accuracy Clearinghouse, a national database to detect and prevent individuals from receiving SNAP benefits in more than one state
Energy
To offset many of the tax extensions and increases in the bill, the bill would save over half of a billion dollars by eliminating or phasing out many of the climate change and energy credits contained in the so-called Inflation Reduction Act.
The bill would set aside $2 billion for the Strategic Petroleum.
It would also establish a $250 registration fee for electric vehicles and a $100 fee for hybrids, indexed to inflation that would be used to fund the Highway Trust Fund.
Spending and the Deficit
The Joint Committee on Taxation (JCT) estimated that if the bill as written were passed it would increase the deficit by $3.8 trillion through 2034. The Committee for a Responsible Federal Budget (CFPB) noted that if the bill’s expiring policies are extended permanently, it would add $5.3 trillion to the deficit.
This is why some conservatives such as Rep. Chip Roy (R-TX) and Sen. Mike Lee (R-UT) have said the bill still needs work:
Lee, in an interview with Breitbart News Deputy Politics Editor Bradley Jaye, said Republicans should not waste a generational opportunity to get the policy right on this bill.
“There are some things that we need to address as we advance legislation, in order to advance President Trump’s agenda, in order to advance what he has laid out as what needs to be to be done, that both he and those who elected him have demanded,” Lee told Jaye.
Sean Moran is a policy reporter for Breitbart News. Follow him on X @SeanMoran3.
Read the full article here