Trump enacts tax legislation - Trump enacts tax legislation
In a historic move, U.S. President Donald Trump signed the "One Big Beautiful Bill" on Independence Day, 2017. The substantial legislative package combined tax cuts, defense and border security funding, and significant changes to social programs and healthcare.
The bill permanently extended most of the tax cuts from Trump's 2017 Tax Cuts and Jobs Act, which were originally set to expire by the end of 2025. Supporters argued that these cuts would boost economic growth, while critics warned they disproportionately benefited the wealthy and substantially increased the national debt.
The bill allocated significant funds for national security, including $46.5 billion for constructing the border wall and related land purchases, $45 billion to expand immigrant detention capacity, and $30 billion more for Immigration and Customs Enforcement (ICE) for hiring and resources. Defense spending was also increased as part of the broader budget.
To help offset the cost of tax cuts and increased security spending, the bill imposed cuts on social programs like Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). It introduced new work requirements for Medicaid adults and SNAP recipients, particularly able-bodied adults up to age 64, and increased the frequency of eligibility reviews. These changes were projected to result in millions losing Medicaid coverage over the next decade.
The Medicaid cuts and imposed work requirements were significant. The Congressional Budget Office estimated that roughly 11.8 million people could lose Medicaid health coverage because of the bill within 10 years. These reductions, along with cuts to nutrition assistance, raised concerns about increased uninsured rates and adverse effects on vulnerable populations.
The bill also adjusted the state and local tax (SALT) deduction cap, eliminated some tax credits (like electric vehicle credits), reduced taxes on tips and overtime under income limits, and made changes to credits benefiting solar and wind energy manufacturers. It also removed taxes on firearm silencers and provided extra funding for ICE to become a larger law enforcement agency than the FBI.
The bill's signing on July 4 symbolized a legislative milestone for the Trump administration but highlighted tensions between fiscal conservatives concerned about deficits and those supporting expanded security and tax reforms. The Congressional Budget Office forecasted significant increases in the federal deficit — about $3.4 trillion over 10 years — largely due to permanent tax cuts and spending increases not fully offset by cuts to social programs.
Criticism of the bill focuses on the proposed cuts to the U.S. healthcare system Medicaid. The bill's signing ceremony followed a long struggle in Congress, with Vice President JD Vance casting a tie-breaking Senate vote and a slim House margin (218 to 214) reflecting sharp division among lawmakers.
The air show honoring pilots of the recent U.S. strike "Operation Inherent Resolve" on Iranian nuclear facilities was part of the Independence Day celebrations at the White House. A B-2 stealth bomber, the same type used to transport bunker-busting bombs to Iran, was among the aircraft seen in the skies over Washington during the celebrations. Security measures were taken around the White House, with many barriers and police cars seen in the side streets.
Independence Day is celebrated everywhere, with everything decorated in the colors of the U.S. flag and fireworks. Trump spoke to invited guests about the achievements of his presidency during the ceremony. Melania Trump was present during the bill signing ceremony.
[1] Congressional Budget Office. (2017). Cost estimate for H.R. 3354, the “Tax Cuts and Jobs Act.” Retrieved from https://www.cbo.gov/publication/53240 [2] Joint Committee on Taxation. (2017). General Explanation of the Revenue Provisions of the Tax Cuts and Jobs Act. Retrieved from https://www.jct.gov/publications/2017/gcjta-20171218-dtd/index.html [3] The White House. (2017). Statement by the Press Secretary on the Passage of the Tax Cuts and Jobs Act. Retrieved from https://www.whitehouse.gov/briefings-statements/statement-press-secretary-passage-tax-cuts-jobs-act/ [4] Congressional Research Service. (2017). An Analysis of the Conference Agreement for H.R. 1, the “Tax Cuts and Jobs Act.” Retrieved from https://fas.org/sgp/crs/misc/R44987.pdf [5] Centers for Medicare & Medicaid Services. (2018). Medicaid and CHIP Program Information and Data. Retrieved from https://www.medicaid.gov/medicaid/program-information/program-data/index.html
- The "One Big Beautiful Bill" also made changes to the state and local tax (SALT) deduction, abolished certain tax credits like electric vehicle credits, and lowered taxes on tips and overtime under income limits. However, these alterations in the tax policy sparked debates and concerns, as they could disproportionately affect middle-class and low-income households.
- In the realm of politics and policy-and-legislation, the Medicaid cuts and work requirements imposed by the bill stirred controversy, especially considering the potential impact on EC countries, as the bill's projected loss of Medicaid health coverage for millions could increase general-news headlines about uninsured rates and adversely affect vulnerable populations.
