The House passed Trump’s ‘big, beautiful bill.’ Here’s how it affects taxpayers and businesses.

The House of Representatives Thursday approved Donald Trump’s ‘big, beautiful bill’ and moved it a key step closer to becoming law, sending the legislation to the Senate after a harried week of last minute changes and two tense all-night debates.

In the end, House Speaker Mike Johnson muscled through the more than 1,000-page package of tax cuts, trims to the government’s social safety net, and new Washington spending on the narrowest of votes: 215-214.

Republican Reps. Warren Davidson of Ohio and Thomas Massie of Kentucky joined all Democrats in opposing the measure. GOP Rep. Andy Harris of Maryland voted present.

“It quite literally is morning in America,” Johnson quipped Monday just before a final vote that came a little before 7 am ET. “This is a big one,” the speaker added after the vote had wrapped, calling the changes in the bill “generational” and reiterating his goal of getting the bill signed into law by July 4.

The final push for the package began on Wednesday evening with the release of a 42-page manager’s amendment that offered a series of changes, most notably a more generous deduction for state and local taxes (SALT) as well as more stringent work requirements for the Medicaid program.

The plan will also raise the nation’s debt ceiling by $4 trillion after Treasury Secretary Scott Bessent warned America’s borrowing authority is at the “warning track” and could be exhausted by August.

The tab for all these changes is set to be sizable, with the nonpartisan Congressional Budget Office (CBO) finding that the bill will lead to over $3 trillion in new red ink over the next decade.

The CBO also released an analysis this week stating the bill’s effect would lead to the bottom 10 percent of Americans seeing their household resources reduced by 4 percent — largely through cuts to federal spending on Medicaid and food aid — while the top 10 percent would see an increase in their resources by 2 percent.

That analysis further fueled the Democratic charges that the bill amounted to little more than a giveaway to the rich. Democratic House leadership slammed the package after the vote, saying it “rips healthcare and food assistance away from millions of people in order to provide tax cuts to the wealthy, the well-off and the well-connected.”

The bill will also reshape numerous corners of the American government if it is signed into law, with new spending included for action on the southern border, for the US military, for education cuts in areas like Pell Grants, as well as other areas.

The bill could still see significant changes when the Senate has its say. Here are some of the provisions in the House bill most in focus for taxpayers and businesses.

The bill is centered around an extension of tax cuts for individuals contained in the 2017 Tax Cuts and Jobs Act, signed into law by Trump during his first term as president.

The immediate effect if the bill passes would be a continuation of the status quo for taxpayers after that 2017 law temporarily lowered rates, with this law aiming to extend them permanently. If Congress doesn’t act, those lower rates will expire and will go up to pre-2017 levels next year.

If the bill is passed, America’s highest earners will see a continued top rate of 37%. That comes after Republicans debated but discarded an idea to raise the rate on millionaires.

The bill also provides some new goodies for individuals.

The most hotly debated tax addition involved ​​deductions for state and local taxes (SALT). In the end, Speaker Johnson acceded to a group of blue-state Republicans and included a higher SALT deduction of $40,000 annually in the package up from the current annual deduction of $10,000.

The bill also will fulfill signature Trump campaign promises to eliminate taxes on tips, overtime, and car loan interest. It also offers an expanded standard deduction for seniors after the president promised on the campaign trail to eliminate taxes on Social Security benefits.

The no tax on tips and overtime provisions exclude “highly compensated employees” who fall above certain thresholds and were also recently revised to include gig economy workers.

Analysts have pointed out that many of these politically popular but costly provisions are set to expire in 2029, just as Trump is scheduled to leave office as part of many changes that would be temporary.

Other examples of temporary changes are an increase in the child tax credit to $2,500 from its current $2,000 level. Another is a $1,000 bonus to the standard deduction, from $15,000 to $16,000 for single filers.

Both expire in 2029 as well.

The temporary nature of these changes could end up increasing the final tab by a lot.

The Penn Wharton Budget Model looked at the costs of the bill as it is written and found an increase to primary deficits by $3.3 trillion over 10 years. But a parallel analysis if some changes were made permanent found the costs balloon to $5.8 trillion over 10 years.

The largest spending cuts in the bill were centered around health care and the Medicaid program, including new work requirements.

After a flurry of last minute negotiations, the date for those work requirements are now set to go into effect “not later than December 31, 2026” after early plans had been for a 2029 beginning of these requirements.

The bill also saves money through cuts to the Supplemental Nutrition Assistance Program (SNAP) program — formerly known as food stamps.

Analyses have found that those two changes could save over a trillion dollars but also cause millions of Americans to lose health care coverage and food benefits.

Other parts of the bill address things like estate and gift taxes, as well as measures to broaden the reach of health savings accounts and 529 education savings accounts.

The bill also creates new savings plans for children that were initially called MAGA (“Money Accounts for Growth and Advancement”) accounts but then changed late Wednesday night to something equally political: “Trump accounts.”

Either way, the accounts would be jump-started for US citizens with a potential $1,000 contribution from the government and would then allow contributions of up to $5,000 annually from after-tax dollars.

But the utility of these accounts was immediately questioned with tax experts noting that existing 529 accounts have more tax advantages for parents, limiting the motivation to add more money after the government’s initial contribution.

The bill also includes a series of business-centered provisions centered around things like the reinstatement of deductions for the depreciation of property, interest expenses, and research and development costs.

The bill also makes permanent the 199A deduction at a new rate of 23%. That deduction — also known as the pass-through deduction — is focused on often smaller businesses organized as S corporations or partnerships.

The bill also has a few new wrinkles, such as allowing a 100% expensing deduction for new factories and updates to existing factories. This came late in the process, in part after a White House push led by Bessent.

Another recent push for raising taxes on sports franchise owners was included in the bill after a push from the White House earlier this year.

“The budget reconciliation measure extends and strengthens the historic reforms from the 2017 Tax Cuts and Jobs Act (TCJA), which leveled the playing field for American businesses and made it more attractive for companies to invest and grow in the U.S.,” Business Roundtable CEO Joshua Bolten wrote in a letter to lawmakers Wednesday.

The bill also includes a rollback of clean energy credits implemented during the Biden administration for things like solar panels and electric vehicles.

This was another hotly debated last minute provision with the final amendments Wednesday night making the phaseout of these credits even faster — over the objections of many moderates.

Another piece of the bill limited the ability of states to regulate AI, saying that no state “may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems” for a 10-year period if the bill is passed.

Both the AI and clean energy provisions are potential key tripping points in the months ahead, with some Republican senators openly wary of both provisions and signaling that they might move to amend them when the bill reaches their desks in the coming weeks.

The business side of the ledger is also notable for what is not included.

One tax change that had been hotly debated, with Trump even throwing his weight behind the idea, was closing the carried interest loophole.

But no changes to that tax provision — dubbed by some as the favorite tax break of hedge fund managers — were in the offing when the bill was released.

Likewise, changes to the corporate tax rate were often discussed on the campaign trail but are not included in the package. Trump often talked of lowering the corporate tax rate to 15% for US manufacturers but the bill will leave the corporate tax rate unchanged at 21%.

This post has been updated with additional developments.

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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