ONE BIG UGLY BILL

Once upon a time the US was basking in the glory of fiscal surplus, but is now facing problems of unfettered deficit and debt due to policy tax cuts for rich and corporates starting from the Reagan era to the present regime

- Santosh Kumar Mohapatra

On 22 May, the US House of Representatives passed a multi-trillion-dollar tax bill with a vote of 215 votes to 214 to materialise Trump’s tax cuts promise.

The $3.8 trillion “One Big Beautiful Bill” includes sweeping tax cuts implemented in Trump’s first term, and allocate billions of dollars to defence, immigration enforcement, and other administration priorities. It envisages social spending rollbacks, and over $3 trillion in added deficits. The measure now moves to the Senate, which is expected to make significant changes.

The bill would extend most of the individual and estate provisions of Trump’s 2017 Tax Cuts and Jobs Act (TCJA), which are largely set to expire at the end of 2025. Those include increase of the standard deduction, a fixed dollar amount that reduces the income on which a person is taxed; lower income tax rates for most taxpayers; an increase in a tax credit that can be claimed for a dependent child; a deduction for privately held businesses; and a doubling of the amount that an individual can leave to their heirs upon death without incurring federal estate taxes. The bill also increased the child tax credit from $1,000 to $2,000 per child.