The Big Beautiful Bill has passed, who are the winners and losers of the legislation?

 

Speaker of the House Mike Johnson. AP. 

The Big Beautiful Bill has passed after a dramatic late night fight with only two Republicans voting against it. AP. The bill is wide ranging and includes quite a few different provisions. Not only are the "Trump Tax Cuts" made permanent, it gives major tax deductions for overtime, tips, auto loans on American cars and a tax deduction for older adults. Though they are not quite "no taxes on tips, overtime and Social Security", they are a de facto fulfilment of a Trump campaign promise. Border defense and national security got a boon as well as billions of dollars have been allocated for deportations, building the border wall and hiring of border patrol officers, with the goal of deporting 1 million illegal immigrants a year. To offset the costs, immigrants would face new fees if they want to enter the country, including asylum seekers. 

There are also major cuts to many social welfare programs including SNAP and Medicaid, with some of the costs being offloaded to the states. The bill also cuts most energy subsidies, including ones for solar and wind power, as well as tax deductions for electric vehicles. Other various programs include the "Trump accounts" that provide $1000 investments for children born in the next three years, setting the cost tax stamps for short barreled rifles and suppressors to $0 and new taxes on university endowments and a 1% tax on remittances to foreign countries. 

My Comment:

As with all legislation, there are winners and losers, and I should probably disclose my bias here because I stand to benefit quite a bit from this legislation. The return to the pre-Trump tax rates would have been borderline ruinous for me. But the, somewhat misnamed, no tax on overtime, should be huge for me. Depending on how much OT I work this year, I'm very likely to meet or exceed the $12,500 limit for the deduction, and if the math is right, my next tax return should have an extra $1500 next year. I likely won't get zero taxes on my overtime, I work a lot of OT, but I should be getting a nice bonus. I could potentially benefit from the car loan deduction too, but given all the OT I work, I should be able to buy my next car in cash.

This bill will also help my parents, who are both on social security and should be eligible for the $6000 deduction that was included as an alternative for the "no tax on social security" measure. This will absolutely help them and it is a good thing that their costs will go down. 

The folks that voted for border control and immigration reform are huge winners here, with billions of dollars for the wall, deportations and new border agents. Folks on social media are saying that border enforcement in the Untied States has a larger budget than many countries militaries. I don't know if that is true or not, but it sounds believable. 

Indeed, illegal immigrants are the biggest loser for this bill by far. Not only is there going to be a huge effort to deport as many of them as possible, they are also going to lost a lot of benefits as well. The various social program cuts aren't targeting illegal immigrants directly, but they will absolutely be affected. And the 1% tax on remittances should be an issue for them as well, as so many of them send billions of dollars back to their home countries. 

The green energy industry is a big loser as well. Many of Biden's subsidies to those companies have been pulled and that includes the tax deduction for electric vehicles, which explains why Elon Musk went absolutely bonkers against this bill. In short, if you want to buy a Tesla or other electric car, do it now before the tax deduction goes away in September. 

The gun rights community is treating this as a loss, even though they got a minor win. They are making perfect the enemy of good, because setting the tax stamp for buying a suppressor or short barreled rifle to $0 instead of $200 is a win, though obviously not the huge victory that getting rid of those categories entirely. I understand that they are upset that the SHORT act got removed but there is a real question if the bill would have passed if it was included. They should take the win and be happy that any gun regulations were loosened at all, I know I am happy with it. 

Fiscal conservatives are claiming this as a L, but I always said their objections were insane. They say this budget increases the deficit but that only works if you have already spent the money that not passing the bill would have massively increased the tax rates by 68%. Instead, the bill is status quo ante in terms of the tax rate, and though some new breaks are included, they are going to be offset by new taxes, including the taxes on remittances and so on. 

And even if the fiscal conservatives were right, it would be an act of utter insanity to raise taxes right before the 2026 midterms. Right now the Republicans stand a decent chance of both keeping the house and the Senate, and perhaps even extending their lead. Raising taxes though? That's be the death knell of the Republican Party, perhaps for one election, but also possibly for a generation. 

Elon Musk has to be the biggest loser here. The loss of green energy subsidies should be a major problem for him. Tesla was already having sales issues due to Democrats, and liberals globally, boycotting him (and his subsequent fallout with Trump pushing away conservatives as well) and getting rid of the subsidies will hurt him. The entire thing also showed the limits of his power, Musk might be the richest man on earth but despite threatening primary challenges against everyone that voted for the bill, he also threatened a new party. With that he was only able to get Thomas Massie on his side as the other guy that voted down the bill, Brian Fitzpatrick, officially voted it down for the Medicaid but everyone thinks he did it because of Ukraine, of all things. Musk has been mostly silent since the bill has passed so it's unclear what, if anything, he will do next.