House Passes Trump Tax Bill Increasing SALT Deduction 300%

The US House of Representatives has narrowly passed President Donald Trump’s comprehensive tax and spending legislation, known as the One Big Beautiful Bill Act, with a vote of 215-214. This legislation now moves to the Senate for further review and deliberation.

The bill is extensive, containing numerous provisions aimed at making permanent the tax cuts introduced in 2017. It includes exemptions for tips, overtime pay, and car loan interests, and raises the state and local tax (SALT) deduction cap from $10,000 to $40,000 for incomes under $500,000. Additionally, the child tax credit is increased to $2,500 through 2028, after which it will revert to $2,000. The legislation also establishes $1,000 savings accounts for children born during Trump’s second term and includes a 5% tax on remittances.

In terms of defense and border security, the bill allocates around $150 billion to defense, including $20 billion for a missile defense system. The remaining funds are designated for border security, with $50 billion allocated for completing the southern border wall.

The legislation also includes social program cuts and education reforms. It implements work requirements for Medicaid and SNAP beneficiaries, ends federal direct subsidized loans for undergraduates, and introduces stricter eligibility criteria for Pell Grants. Furthermore, the bill incorporates a significant reduction in green energy tax credits from the Biden-era Inflation Reduction Act.

The Congressional Budget Office (CBO) estimates that the bill will add approximately $3.8 trillion to the national debt over the next decade, increasing it to 125% of GDP. The CBO also projects that the proposed changes would result in 8.6 million fewer people having healthcare coverage and 3 million fewer individuals receiving SNAP food stamp benefits each month.

Democrats have criticized the bill for favoring the wealthy and cutting essential services for vulnerable populations. The bill passed with unanimous Democratic opposition, along with a few Republican members opposing it. The Senate will now review the bill, with debates anticipated to focus on its fiscal implications and social program reforms. Any amendments will require reconciliation with the House version before the bill can be enacted into law.