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The Independent
an hour ago
- Business
- The Independent
Senate version of Trump's Big Beautiful Bill holds ‘'unexpected' tax break up to $2,000 for nearly all Americans
The Senate version of President Donald Trump's 'One Big, Beautiful Bill' legislation includes a tax break that would benefit 90 percent of Americans, CNBC reported. The Senate Finance Committee released the text for the tax and health care aspects of the Senate's version of the bill that passed the House of Representatives last month. The House version allows people who do not itemize their taxes to deduct $150 for individuals and $300 for joint filers like married couples. But the Senate version would allow $1,000 for single filers and $2,000 for joint filers. Typically, people need to choose to itemize their taxes to receive the charitable contribution deduction. The rare exception came during the Covid-19 pandemic. But 9 out of 10 Americans use the standard deduction, meaning the $2,000 tax break could come to most Americans. 'This could provide some tax savings for folks,' Erica York of the Tax Foundation, a conservative think tank, told CNBC. 'That could be something unexpected if you're not currently deducting charitable giving.' The Senate is currently debating its version of the 'One Big, Beautiful Bill,' as Trump requested Republicans to name it. In addition to the charitable deduction, Republicans hope to extend the 2017 tax cuts that Trump signed during his first tenure in the White House, boost up money for the military, military spending and oil production in the United States. But Republicans remain split on a number of aspects of the bill, including its changes to Medicaid. Fiscal conservatives also say that the bill does not do enough to slash federal spending. Earlier this week, the nonpartisan Congressional Budget Office released its dynamic estimate and it found that it would increase the deficit by $3.4 trillion. Other Republicans want to keep the renewable energy tax credits that then-President Joe Biden put into place in the 2022 Inflation Reduction Act because many Republican states benefited from the law. Republicans have only 53 seats in the Senate. To sidestep a filibuster, they plan to use a process called budget reconciliation, which allows them to pass legislation with a simple majority as long as it relates to federal spending and taxes. Currently, the legislation is undergoing the 'Byrd Bath,' wherein Senate Parliamentarian Elizabeth MacDonough, a career Senate employee, evaluates whether the legislation follows the rules of budget reconciliation and none of the parts of the bill are 'merely incidental' to the budget.
CNBC
2 days ago
- Business
- CNBC
'Most taxpayers will see a cut': Senate's tax plan for Trump's spending package would permanently extend TCJA cuts
This week, the Senate Finance Committee released details on its version of President Donald Trump's "big, beautiful" budget bill. The committee's text reveals some departures from the version of the legislation that passed the House last month, including differences in Medicaid rules, state and local tax deduction limits and clean energy tax credits. The differences could set up the two chambers to duke it out over the details as they approach a self-imposed July 4 deadline to get the legislation on Trump's desk. If you're wondering if your taxes are likely to go down next year, the answer is almost certainly, "yes." That's because both versions of the bill permanently extend the tax cuts introduced in the 2017 Tax Cuts and Jobs Act, while also introducing a new slate of breaks for filers. "It's a continuation of tax policy in place right now, plus additional tax cuts on top of that," says Erica York, vice president of federal tax policy at the Tax Foundation. "On net, most taxpayers will see a tax cut, and on average, all income groups would see a tax cut." The 2017 bill brought about sweeping, albeit temporary, changes to the tax code. Provisions which nearly doubled the standard deduction, upped the monetary thresholds for tax brackets, lowered the top tax rate and bumped up the child tax credit are set to expire at the end of 2025. If Congress lets that happen, 62% of taxpayers will see an increase in what they pay Uncle Sam, according to Tax Foundation estimates. "Lawmakers across the board, and I would say even across the aisle, agree that they don't want to see those tax increases happen for the vast majority of Americans," says York. Whether the final version of the budget bill looks more like the House or Senate version, Americans are getting continuity: the same tax rates, the same brackets and a standard deduction that's high enough to keep taxes simple for the vast majority of Americans; just 9% of taxpayers itemized in 2022, compared with 31% in 2017, according to data released by Congress. Both versions of the bill call for an increase in the standard deduction beginning after tax year 2025. However, some tax breaks look different in the Senate and House versions of the legislation. The Senate bill, for instance, raises the nonrefundable Child Tax Credit to $2,200 starting in 2025, $300 lower than what the House proposed. Both versions make good on Trump's campaign promise to do away with taxes on tipped income, but the Senate legislation caps the deduction at $25,000 a year, with different rules about who can claim the break based on income. Regardless of what the bill looks like in its final form, it's worth keeping track of exactly how it affects what you owe come tax time, says York. To figure out what kind of tax break you got, focus on what you pay next year versus what you paid this year, she says — not the difference in any refund you might receive. "Your refund doesn't really reflect how much you actually pay. It just reflects whether your withholding matched up with what your tax liability was supposed to be," she says. "Whether or not you get a refund [is] not related to what Congress is doing with tax law."
Yahoo
12-06-2025
- Business
- Yahoo
6 Nobel Prize-Winning Economists Have ‘Grave Concerns' About Trump's Bill — Should You Be Worried?
Six Nobel Prize-winning economists issued a public warning about President Donald Trump's proposed budget bill, calling its priorities harmful to the U.S. economy. In their joint statement made via nonpartisan think tank the Economic Policy Institute, they cited 'grave concerns' over how the bill would affect U.S. households. Learn More: Check Out: Their criticism focused on two things: tax cuts for corporations and high earners, and cuts to essential assistance programs. Their concern is that the bill would shift wealth upward while reducing economic stability for everyone else — but should Americans be concerned? According to the economists, this bill includes tax cuts that are 'overwhelmingly tilted toward the highest-income households.' It also cited the preservation of a corporate income tax cut. Supporters argue this would fuel business investment and wage growth, according to The White House, but the economists disagree. They said these tax cuts, along with other factors in the bill, would lead to higher public debt and deficits. The Tax Foundation, on the other hand, cited both pros and cons to the tax provisions in the bill, claiming that it includes some 'smart tax cuts,' but also noting that some tax cuts were chosen over 'more effective measures to grow the economy.' Read Next: More damaging than the tax cuts, the economists said, are the proposed cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), both services that millions of Americans depend on — especially those living paycheck to paycheck. They described the Medicaid cuts as 'a sad step backward in the nation's commitment to providing access to health care for all' and emphasized that the impact would extend well beyond those targeted by proposed work requirements. These cuts, they wrote, threaten not only low-income households but also the stability of state budgets and particularly rural hospital systems that rely heavily on Medicaid funding. The White House, on the other hand, claimed that the bill 'makes permanent fixes' to these programs, which would save taxpayers money. Although inflation has eased in recent months, the economists argue that this budget could increase financial strain in the future, causing 'acute and immediate damage' to millions of families. Safety net programs like Medicaid and SNAP support low-income households, and the proposed cuts could hit them hardest. Additionally, the bottom 40% of households would face 'absolute losses,' according to the economists. Their message is clear that this isn't just about fiscal policy; it's about day-to-day economic stability. The White House, on the other hands, has said this bill would 'supercharge' the economy, citing wage increases, tax credits and tax cuts. There are many differing opinions on what the impacts of this bill would be for Americans if it were to pass. The economists in the open letter explained that this bill fails to address many economic challenges the U.S. is facing, while proponents of the bill think it would boost the economy and save Americans money. It remains to be seen what the outcome of the bill will be. Some congressional leaders want to pass the bill, while others are pushing back, so Americans will have to wait and see whether the bill will pass and what its impacts will be. In the meantime, Americans can practice good financial management, like paying down debt and sticking to a budget, to ensure their finances are in order in the event of any impacts this bill could have on their wallets. Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates Mark Cuban Tells Americans To Stock Up on Consumables as Trump's Tariffs Hit -- Here's What To Buy This article originally appeared on 6 Nobel Prize-Winning Economists Have 'Grave Concerns' About Trump's Bill — Should You Be Worried? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
12-06-2025
- Business
- Yahoo
6 Nobel Prize-Winning Economists Have ‘Grave Concerns' About Trump's Bill — Should You Be Worried?
Six Nobel Prize-winning economists issued a public warning about President Donald Trump's proposed budget bill, calling its priorities harmful to the U.S. economy. In their joint statement made via nonpartisan think tank the Economic Policy Institute, they cited 'grave concerns' over how the bill would affect U.S. households. Learn More: Check Out: Their criticism focused on two things: tax cuts for corporations and high earners, and cuts to essential assistance programs. Their concern is that the bill would shift wealth upward while reducing economic stability for everyone else — but should Americans be concerned? According to the economists, this bill includes tax cuts that are 'overwhelmingly tilted toward the highest-income households.' It also cited the preservation of a corporate income tax cut. Supporters argue this would fuel business investment and wage growth, according to The White House, but the economists disagree. They said these tax cuts, along with other factors in the bill, would lead to higher public debt and deficits. The Tax Foundation, on the other hand, cited both pros and cons to the tax provisions in the bill, claiming that it includes some 'smart tax cuts,' but also noting that some tax cuts were chosen over 'more effective measures to grow the economy.' Read Next: More damaging than the tax cuts, the economists said, are the proposed cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP), both services that millions of Americans depend on — especially those living paycheck to paycheck. They described the Medicaid cuts as 'a sad step backward in the nation's commitment to providing access to health care for all' and emphasized that the impact would extend well beyond those targeted by proposed work requirements. These cuts, they wrote, threaten not only low-income households but also the stability of state budgets and particularly rural hospital systems that rely heavily on Medicaid funding. The White House, on the other hand, claimed that the bill 'makes permanent fixes' to these programs, which would save taxpayers money. Although inflation has eased in recent months, the economists argue that this budget could increase financial strain in the future, causing 'acute and immediate damage' to millions of families. Safety net programs like Medicaid and SNAP support low-income households, and the proposed cuts could hit them hardest. Additionally, the bottom 40% of households would face 'absolute losses,' according to the economists. Their message is clear that this isn't just about fiscal policy; it's about day-to-day economic stability. The White House, on the other hands, has said this bill would 'supercharge' the economy, citing wage increases, tax credits and tax cuts. There are many differing opinions on what the impacts of this bill would be for Americans if it were to pass. The economists in the open letter explained that this bill fails to address many economic challenges the U.S. is facing, while proponents of the bill think it would boost the economy and save Americans money. It remains to be seen what the outcome of the bill will be. Some congressional leaders want to pass the bill, while others are pushing back, so Americans will have to wait and see whether the bill will pass and what its impacts will be. In the meantime, Americans can practice good financial management, like paying down debt and sticking to a budget, to ensure their finances are in order in the event of any impacts this bill could have on their wallets. Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates Mark Cuban Tells Americans To Stock Up on Consumables as Trump's Tariffs Hit -- Here's What To Buy This article originally appeared on 6 Nobel Prize-Winning Economists Have 'Grave Concerns' About Trump's Bill — Should You Be Worried?
Yahoo
12-06-2025
- Business
- Yahoo
The $11 trillion gap between White House and economists on Trump's 'big, beautiful' bill
An array of economists — from the Congressional Budget Office to the Tax Foundation to the Penn-Wharton Budget Model — have reached a similar conclusion: Trump's signature legislation comes with a price tag in the neighborhood of $3 trillion over the next decade. They're all wrong, the White House says. And not just by a little. President Trump and his aides have instead offered claims that the bill will make money and that the final tally for both the tax-cutting legislation and other parts of the Trump agenda will usher in a new golden age not just for the US economy but also for government debt. The claims from 1600 Pennsylvania Avenue go as high as $8 trillion in black ink (an $11 trillion chasm with the experts) in claims that go beyond what even Capitol Hill Republicans are projecting. As for reconciling the two, some economists essentially throw up their hands. "You can't square it because it's ridiculous," Erica York of the Tax Foundation said. "The bill unambiguously will increase deficits, it will not contribute that much to economic growth," she added, noting that the bill is largely focused on extending current tax rates that would not be expected to push the economy significantly upward from current levels. Yet the White House has remained steadfast even as this gap has led to increased tensions as the bill goes through another round of adjustments on Capitol Hill. A Wednesday appearance before Congress by Treasury Secretary Scott Bessent was marked by lawmakers — mostly Democratic, but some Republicans as well — raising the debt issue. In one colorful moment, Democratic Rep. Mike Thompson of California asked Bessent to point to an independent expert "not on the payroll of this administration" who says this bill will not add to our debt. Bessent then cited Arthur Laffer, the former Reagan official and longtime Trump supporter who received the Presidential Medal of Freedom during the president's first term. The comment led to laughter in the chamber, with Thompson shooting back, "I don't think that one counts." It was a hearing where Bessent declined to repeat some of the administration's most aggressive claims, saying instead that "it remains to be seen" whether the bill will add to the national debt. Others have not been so restrained about the impact of Trump's overall agenda. "We're going to cut the deficit by $8 trillion over the next 10 years," press secretary Karoline Leavitt offered recently on Fox News. And a recent White House memo offered a slightly lower figure of about $6.7 trillion to $6.9 trillion in deficit reductions over the coming decade. One issue is that White House projections rely on a set of assumptions that are often internally contradictory, such as taking credit for taxes spurring economic growth while simultaneously saying they have no cost. Other parts of the bill would enact temporary tax cuts — and then take credit for lower costs there — while also claiming other permanent cuts are free. That's in addition to an overriding assumption at the White House that, essentially, things break historically right for the US economy and sustained 3% economic growth is in the offing. That's above even what House Republicans are projecting, as lawmakers there have rallied behind a lower (but still very aggressive) assumption of 2.6% growth. Both projections are unlikely, Marc Goldwein of the Committee for a Responsible Federal Budget said. "Some people are at 2%, some people are at 1.6% ... that is the neighborhood," he said of a series of projections for growth that hover around 1.8%. He added in an interview that even if sustained 3% growth were to happen, "it would have very little to do with this tax bill." Yet the White House has repeatedly dismissed the experts. Trump budget chief Russ Vought recently told reporters that everything "is part of a coherent fiscal agenda" and that the combination of tax cuts, tariffs, additional promised spending cuts, and "reforms we can do ourselves" to programs like Medicaid will lead to good outcomes for the US bottom line. White House projections also fully embrace recent CBO projections of $2.8 trillion in tariff revenues over the coming decade. But that embrace appears to ignore a prediction in the same report that tariffs will "reduce the size of the U.S. economy" and also lead to a potential inflation increase of 0.4 percentage points in 2025 and 2026. York has calculated that even two seemingly minor adjustments — taking the slightly lower but still very aggressive House estimate of 2.6% economic growth and factoring in the economic costs of tariffs — means the bill "is basically a wash or even negative for GDP." "They're picking and choosing," she added. Read more: What Trump's tariffs mean for the economy and your wallet And few are expecting tariffs to stay steady in the coming months, not to mention the coming years. Tariff levels are under active negotiation — two fronts this week are duties on goods from China and India — as the CBO report assumed rates remain steady not just during Trump's term, but also years after he is scheduled to leave office. The tariffs are also under a considerable cloud of legal uncertainty, with an appeals court ruling on Tuesday that Trump's "Liberation Day" tariffs could stay in force for now while it considers whether they are legal. "Even if they are upheld by the courts, it still seems like the Trump administration is willing to negotiate them down somewhat," York noted, "and then what happens in four years when a new administration comes in?" Ben Werschkul is Washington correspondent for Yahoo Finance. David Foster is a graphic artist for Yahoo Finance. 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