President Trump’s “One Big, Beautiful Bill” may move one step closer to fruition today. Congress is poised to consider the permanence of tax cuts, new spending cuts, reforms to boost energy production, and more. 

The U.S. House Ways & Means Committee unveiled the tax provisions of this bill. This 389-page legislation promises to not only make permanent many provisions Americans enjoy today, but also to enhance them and provide new tax savings.

While the bill is not perfect and may not meet every demand, the overall picture is good. Women, families, and households are poised for rising take-home pay, falling tax bills, and improving financial situations. 

Key Takeaways

We’ve combed through the bill so you don’t have to. Here are key provisions from the One Big, Beautiful Bill:

  • Lowered income tax rates → permanent
  • Doubled Child Tax Credit → permanent (plus an additional $500 for the next four years) 
  • Enhanced Standard Deduction → permanent (plus an additional $1,000-$2,000 for the next four tax years)
  • No tax on overtime pay → new deduction for the next four years 
  • No tax on tips → new deduction for the next four tax years
  • No tax on car loan interest → new deduction for the next four years
  • Seniors deduction → new $4,000 deduction for the next four tax years
  • Charitable deduction → reinstated for itemizers and nonitemizers 
  • 20% small business deduction → permanent (plus it’s raised to 23% for the next four tax years)
  • MAGA Accounts → new savings accounts for children
  • SALT deduction → raised to $30,000 from $10,000

Many provisions of the 2017 tax cuts have been made permanent, such as the doubled Child Tax Credit (CTC), enhanced standard deduction, and lowered rates. Furthermore, these provisions gained additional temporary enhancements for the next few years, such as an extra $500 per child for the CTC. Plus, they are indexed for inflation.

Some of President Trump’s campaign promises were also included: the no tax on tips and no tax on overtime pay promises have been delivered through proposed new deductions for the next four tax years. 

While the committee did not propose to end taxes on Social Security benefits, as President Trump also promised, it did create a new deduction for seniors for the next four tax years. For Americans age 65 or older, an individual could take a $4,000 deduction if his or her adjusted gross income does not exceed $75,000 for single filers ($150,000 for married filing jointly). The seniors deduction would be available to both itemizers and non-itemizers. 

In addition, American taxpayers may no longer have to pay taxes on the car loan interest through a deduction of up to $10,000 for passenger vehicles over the next four years.

Interestingly, the bill also creates a new savings account for babies and kids in America. Money Accounts for Growth and Advancement, or “MAGA Accounts,” are “a new kind of savings account designed to incentivize education, entrepreneurship, and homeownership while promoting financial security.” 

These tax-deferred accounts for kids under age 8 could be paid into by parents, family members, nonprofits, and businesses. They are meant to be funded until children reach 18 years old. In adulthood, the funds could be used for higher education, vocational training, home purchases, and more. 

MAGA accounts are paired with a new pilot program that creates a virtual mini baby bonus. The federal government would deposit $1,000 for each child born over the next four years. The details remain to be seen with this plan, but it is still worrisome. 

While inspiring Americans to give birth is noble, a handout for new babies is costly and may not fix our nation’s declining fertility rates. A robust economy that lowers prices and boosts incomes creates financial security for Americans to have children.

What This Means For Me

If Congress does nothing, virtually every American will receive a tax increase starting in January. The average taxpayer will get a 22% tax hike. 

This bill would ensure that taxes do not rise but are made permanent. In addition, for the next four years, there are several sweeteners that bump up your current tax savings.

Lower- and middle-income households are big winners in this tax bill. From the exclusion of tipped wages and overtime pay to the enhanced child tax credit, families and individuals may look forward to:

  • $5,000 boost in take-home pay for a family with two children.
  • 6 million American jobs saved.
  • 40 million families receive a boosted $2,500 Child Tax Credit.
  • 2 million family farms saved from higher death tax.

This tax bill comes at a cost to be determined. However, the cost of inaction would be massive tax increases on households and businesses that could slow the economy down and drive up unemployment.

As our recent tax cuts polling demonstrated, women, seniors, independents, and voters overall overwhelmingly want the 2017 tax cuts to be extended. It’s now up to Congress to make that happen.