politics
Tax Law Extends 2017 Cuts, Raises SALT Cap, and Adds Deductions for Tips, Overtime, and Seniors
The One Big Beautiful Bill Act, signed July 4 2025, extended 2017 tax cuts and added new deductions while tightening work rules for SNAP and Medicaid. High-income households, corporations and some workers gained while federal program enrollment declined. Changes affecting Medicaid begin in 2027.
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President Trump signed the One Big Beautiful Bill Act on July 4 2025, extending provisions of the 2017 Tax Cuts and Jobs Act and introducing new tax deductions and spending reductions. CBS News reported that the law permanently preserved the top individual income-tax rate at 37 percent for individuals earning over $640,000 and married couples earning at least $768,000 annually.
It also raised the state-and-local-tax deduction cap from $10,000 to $40,000 per year.
The top 1 percent of taxpayers are projected to receive $1 trillion in tax cuts over a decade, according to the Institute on Taxation and Economic Policy. Corporations gained from the restoration of 100 percent bonus depreciation for short-lived assets and immediate deductibility of domestic research-and-development expenses.
Amazon, Alphabet, Meta and Tesla together received $51 billion in tax breaks in 2025, much of it from the new law, the same analysis found.
About 7 million workers claimed the no-tax-on-tips deduction with a typical amount of $7,000, while 28 million claimed the no-tax-on-overtime deduction averaging $3,100, the House Ways and Means Committee reported. Taxpayers over age 65 received a $6,000 bonus deduction subject to phase-outs above $75,000 for single filers, and about 34 million seniors claimed it.
The law created Trump Accounts that provide a $1,000 Treasury deposit for eligible newborns born through 2028.
More than 6 million Americans have opened such accounts as of July 2026, Treasury Secretary Scott Bessent told CBS News. Michael and Susan Dell pledged $250 to each of up to 25 million children under age 10 in lower-income areas. SNAP participation fell by more than 4 million people, or 10 percent, between enactment and March 2026 after work requirements expanded to able-bodied adults aged 18 to 64.
