Quick Read
- Trump’s tax bill lacks Social Security tax breaks despite campaign promises.
- Seniors can deduct an additional $4,000 in taxes under certain income limits.
- The bill introduces stricter Medicaid requirements, including work obligations.
- It raises the SALT tax deduction cap and eliminates taxes on tips and overtime.
- The legislation now moves to the Senate for review and potential amendments.
Trump’s Tax Bill: No Social Security Relief
The newly passed tax bill, dubbed the ‘One Big Beautiful Bill,’ has stirred debate due to its exclusion of a promised tax exemption for Social Security benefits. Despite this omission, the bill includes several provisions that impact seniors and low-income Americans. The legislation, which passed narrowly in the House, now awaits Senate approval and potential revisions.
Additional Tax Deductions for Seniors
While the bill does not eliminate taxes on Social Security benefits as President Trump had pledged during his campaign, it offers other forms of tax relief for seniors. Individuals aged 65 and older earning less than $75,000 annually—or $150,000 for joint filers—can claim an additional $4,000 standard deduction. However, this benefit phases out for higher income brackets and is set to expire by 2028.
This provision aims to provide temporary financial relief for older Americans, particularly those on fixed incomes. However, critics argue that it falls short of the sweeping changes initially promised.
Medicaid Overhauls: Stricter Requirements
One of the bill’s more controversial aspects is its overhaul of Medicaid. The legislation introduces new work requirements for certain enrollees, particularly childless adults without disabilities. Starting in December 2026, these individuals must work at least 80 hours per month to qualify for benefits. Additionally, the re-enrollment process will occur every six months instead of annually, requiring more frequent income and residency verifications.
These changes are expected to reduce Medicaid spending significantly but could also result in millions losing access to healthcare. According to the Congressional Budget Office, the new requirements may lead to an estimated 7.6 million individuals losing coverage over the next decade.
SALT Deduction Cap Raised
Another notable provision is the increase in the state and local tax (SALT) deduction cap. The bill raises the cap from $10,000 to $40,000 for married couples with incomes up to $500,000. This change aims to appease lawmakers from high-tax states like New York and California, where residents have long criticized the previous cap as punitive.
The increased cap will phase out for higher-income taxpayers and is designed to provide relief to middle-class families in states with high local taxes. However, it has sparked criticism for disproportionately benefiting wealthier households.
Tax Breaks on Tips and Overtime
In line with Trump’s campaign promises, the bill eliminates federal taxes on tips and overtime wages. This measure is expected to benefit millions of workers in the service and retail industries, including waitstaff and hairstylists. The tax exemption will remain in effect until 2028, providing temporary relief for these employees.
Additionally, the legislation allows for a temporary deduction of up to $10,000 in interest payments on car loans for American-made vehicles. This provision aims to support domestic manufacturing while offering financial relief to consumers.
Supplemental Nutrition Assistance Program (SNAP) Changes
The bill also introduces reforms to the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. States will now shoulder a greater share of the program’s costs, and new work requirements will apply to able-bodied adults without dependents. These changes are expected to save approximately $300 billion over the next decade but have raised concerns about their impact on food security.
Under the new rules, individuals aged 55 to 64 must meet work requirements to qualify for benefits. This marks a significant shift in policy, as the current threshold is 54 years old.
What Happens Next?
The ‘One Big Beautiful Bill’ now moves to the Senate, where it is likely to face significant scrutiny and potential amendments. While the House has delivered a legislative victory for President Trump, the bill’s provisions remain a subject of intense debate among lawmakers and advocacy groups.
Critics argue that the bill prioritizes tax cuts for wealthier Americans while imposing stricter requirements on low-income individuals. Proponents, however, contend that it strikes a balance between fiscal responsibility and economic growth.
As the bill progresses through the legislative process, its impact on seniors, low-income families, and the broader economy will continue to be a focal point of discussion.
Source: Bbc, Heraldnews, Ithacajournal, Apnews