President Trump’s ambitious tax overhaul narrowly passed the House in a 215 to 214 vote, sending what he’s dubbed his “big, beautiful tax bill” to the Senate for the next round of debate. After a flurry of late-night negotiations and last-minute revisions, House Speaker Mike Johnson has set his sights on delivering the bill to the president’s desk by Independence Day.
The proposed legislation builds on the foundation of the 2017 Tax Cuts and Jobs Act — extending its individual tax rates and maintaining both the top tax bracket of 37% and the lowest at 10%. For middle- and high-income households, especially in states with steep local levies, a key change could offer significant relief. The bill would raise the cap on the state and local tax (SALT) deduction from $10,000 to $40,000 for joint filers, but only for those earning under $500,000. That’s welcome news for residents in high-tax states like New York, New Jersey, and California. Supporters call the move a long-overdue correction to the tax code’s imbalance. Critics argue it disproportionately helps higher earners and will add to the federal deficit.
Among the headline provisions is one of Trump’s signature campaign pledges: eliminating federal taxes on tips, overtime pay, and interest from loans used to purchase American-made cars. However, those breaks are temporary and set to expire in 2029 unless extended by future legislation.
For families, the bill brings a notable increase in the child tax credit — rising from $2,000 to $2,500 per child. It also introduces a new benefit: a $1,000 government-backed investment account for qualifying newborns, designed to give children a financial head start.
Seniors also stand to gain. Americans aged 65 and older could claim a new $4,000 bonus deduction, although the benefit begins to phase out for individuals earning more than $75,000 or couples above $150,000.
But the bill doesn’t stop at tax breaks. It also enacts sweeping changes to entitlement programs and federal aid. Beginning in late 2026, able-bodied adults without children would be required to work at least 80 hours per month to maintain Medicaid eligibility — a measure the Congressional Budget Office estimates could result in 7.6 million Americans losing coverage over the next decade.
Other revisions target the Affordable Care Act, projecting further reductions in adult health coverage. Meanwhile, the federal share of funding for SNAP — the food assistance program relied on by over 40 million Americans — would be slashed, leaving it up to individual states to fill the gap.
While proponents of the bill hail it as a return to fiscal discipline and a much-needed reset for the tax code, opponents warn that it may deepen income inequality and jeopardize access to critical safety net programs for millions of Americans.
The Senate is expected to take up the measure in the coming weeks, where a close vote and further amendments are all but certain.
