What’s Actually in the “Big Beautiful Bill”?
Passed July 4, 2025 | H.R. 1 | Signed by President Trump | Article by Audrey Herrera
If you’ve heard people talking about the “Big Beautiful Bill” (yes, that’s the real nickname), here’s what you need to know, without the legal jargon. Officially known as H.R. 1, this law was sponsored by Texas Representative Jodey Arrington and signed into law by President Donald J. Trump.
This isn’t just another bill; it rearranges taxes and government benefits for all American citizens while increasing funding for the armed forces and ICE.
Highlights:
Makes the Trump-era tax cuts permanent for individuals and corporations
Adds stricter work rules for people receiving food or health benefits
Raises the national debt ceiling to allow more federal borrowing
Pours money into the military, cybersecurity, and border security
Creates a new “Trump Savings Account” for families with newborns
Passes some costs for programs like Medicaid back to the states
What Changed with Taxes?
This bill extends several tax rules from 2017. Here’s what that actually means:
Permanent Tax Cuts (If You Earn Enough)
Top tax rate stays at 37%
For individuals making over $500,000 or married couples making over $600,000.Capital gains and dividends are taxed at no more than 20% for high earners.
Estate tax exemption doubled:
If you leave behind more than $11 million, your estate pays fewer taxes.
SALT Deduction Expanded (For Some)
The State and Local Tax (SALT) deduction is now capped at $40,000 instead of $10,000—but only if:
You're married, filing jointly
Your income is under $500,000
That cap will go back down after 5 years unless extended.
Itemized Deductions Cut for High Earners
If you make:
$750,000+ (single)
$1.5 million+ (married)
You’ll see:
Your SALT deduction shrinks by 5/37ths of the amount over the limit
Your other itemized deductions shrink by 2/37ths
This quietly lowers deductions for wealthy taxpayers without raising their tax rate.
What’s New?
No Taxes on Tips or Overtime
If you’re a service worker or get overtime, your wages are now federally tax-free. You still have to report them, but you won’t pay federal income tax on that portion.
“Trump Savings Accounts”
Families can now put up to $1,000 per child (per year) in a tax-free account after a baby is born. Think of it like a small savings bond, but you don’t get taxed on the growth.
What About the Debt Ceiling?
The bill raises the federal borrowing limit by $4 to $5 trillion. That means the government can keep paying its bills (for now), but it also adds to the long-term national debt.
Where’s the Spending Going?
This bill ramps up spending in a few big areas:
Military shipbuilding and weapons procurement
Cybersecurity upgrades
Expanded border enforcement and ICE staffing
What’s Changing with Medicaid & SNAP?
Work Requirements
To keep getting Medicaid or SNAP (food stamps), most adults must now:
Work or volunteer 80 hours/month
(Some people, like those with disabilities, are exempt)
Limits on Benefit Increases
The Thrifty Food Plan (used to calculate food benefits) is capped
States now pay more to run these programs, instead of the federal government
Who’s Most Affected?
Middle-income families
Gain from tax cuts and tip/overtime exemptions
High earners ($750K+)
Save big with SALT relief and deduction rules
Low-income individuals
Face stricter requirements and reduced support
State governments
Take on more costs and responsibility
National economy
Gains stability now, but risks growing long-term debt
Final Thoughts
The Big Beautiful Bill brings major shifts, especially in taxes and social programs. It helps high earners and investors by locking in tax breaks. It gives some relief to service workers and parents. But it also places new burdens on low-income Americans and state governments.
Whether it helps the economy long-term or just increases debt is still up for debate.
