The President and the press have named it ‘the one big beautiful bill,’ though the legislation that recently passed the U.S. House of Representatives is more formerly known as the Tax Cuts and Jobs Act. One might add ‘redux’ to the title because it’s primary aim is to prevent the sunsetting of many tax-related provisions of the 2017 Tax Cuts and Jobs Act.

The new bill maintains the current tax brackets and tax rates. It would make the expiring standard deduction levels permanent, and go further to temporarily raise the standard deduction by $2,000 for joint filers ($1,500 for head of household filers) through 2028. Seniors over age 65 would receive an additional $4,000 standard deduction amount for tax years 2025 through 2028. The bill would make the $750,000 limitation on deducting home mortgage interest permanent.

But there are a few differences of note. For starters, the new bill would increase the allowable federal borrowing and reduce federal tax revenue by $4 trillion, which would result in an estimated $4 trillion increase in the debt ceiling.

Another is a doubling of the (already generous) estate tax exemption, to over $15 million per person next year, and gradually phase out the estate tax altogether in increments from 2018 to 2024. The state and local tax deduction cap would be made permanent, but at a higher threshold ($30,000, up from $10,000 currently), but this would be phased down for single filers with $200,000 of adjustable gross income; $400,000 for joint filers.

Tip income would be deductible (not tax exempt) for years 2025 through 2028 for individuals in traditionally tipped industries. And overtime compensation would also be deductible for those same years.

Another provision is called The Johnson Amendment, named after the current Speaker of the House. It would end the (hardly-ever-enforced) IRS provision that churches would lose their nonprofit status if they made political statements to their parishioners. If the new bill is passed, church pastors would be permitted to advise their congregations on how to vote in political campaigns in the ordinary course of religious services and activities without endangering their tax-exempt status.

The bill would allow some provisions to sunset; notably the bonus depreciation and research and development expensing tax breaks for corporations. It would repeal the tax subsidies for purchases of electric vehicles and residential energy efficiency expenditures, and generally eliminate clean electricity tax credits for hydrogen, nuclear, solar and wind investments.

The overall impact, as calculated by the Tax Foundation, would be to increase the Gross National Product by 0.05% and cause wages to shrink by 0.1% in aggregate. The Foundation is more optimistic about the federal deficit than other sources; it estimates that the total budget deficit, over the next ten years, would rise by only $3.3 trillion.

Of course, this bill is not yet law. It is heading to the Senate, which may have its own ideas about some of these provisions.

Two Cheers for the Tariff Paus

The conversation between the stock market and President Trump seems to have reached a satisfactory conclusion for the stock market. After an alarming selloff, the President quickly announced that he would negotiate with, first, the UK and then with China, meanwhile abandoning the punitive tariffs that he had insisted would remain in place.

Neither deal is finalized; we are moving into a 90-day tariff ‘pause’ during which both sides will enter into negotiations. It is possible that the Chinese negotiations will not result in an agreement, and the markets will begin a new conversation. But for now, the significant slump has reversed itself, and the markets are high-fiving themselves with four days of rising values.

For all the tough trade talk, the early outlines of the initial trade deal with the U.K. are curiously lopsided. The U.S. agreed to lower its 27.5% tariff down to 10% on autos manufactured in the U.K. and shipped to the U.S.-for a quota of 100,000 imports. Since the U.K. has not yet shipped that many autos across the Atlantic in any given year, that should be considered a win for their side. The U.S. will allow Rolls-Royce engines, which are used in U.S.-manufactured aircraft, to enter the country duty-free. Washington has also eliminated its 25% tariff on U.K. steel and aluminum exports. And the U.K. held firm on maintaining its 2% digital services tax on the revenues of U.S. tech companies operating in the United Kingdom.

The agreement also gives the U.K. preferential treatment on pharmaceutical exports into the U.S., though that could be temporary.

Each side has agreed to allow the other to export 13,000 metric tons of beef; however, the U.K. will continue to ban imports of U.S. beef from cattle raised with artificial growth-promoting hormones; only hormone-free beef will be allowed into the English marketplace.

Finally, London has agreed to eliminate its 19% tariff on up to 1.4 billion liters of U.S. ethanol, which is America’s top agricultural export to the U.K. (Above that, the U.K. will impose tariffs of between 10% and 50%.)

We will learn the details of the tariff arrangement with China in the next 90 days, but a precedent may have been set with the trans-Atlantic agreement. It seems clear that, with the markets jawboning the Administration, and the threat that they will strike up a new conversation if a deal isn’t reached, the President felt the need to start backtracking, and quickly.

That isn’t always the best formula for a winning negotiating position.

Who Wants to be a Billionaire?

Last month, Forbes magazine released its annual list of people whose net worth exceeds $1 billion, led by (did you have to guess?) Elon Musk ($342 billion), Mark Zuckerberg ($216 billion), Jeff Bezos ($215 billion) and Larry Ellison ($192 billion). All of them, interestingly enough, come from the tech sector.

In all, the magazine found that a record 3,028 individuals now hold a billion dollars of wealth, up from 2,781 last year. (The list goes on for 61 pages in the magazine.) Just under a third of those (902) reside in the United States. China boasts 450 in the club, followed by India (205), Germany (171) and, interestingly, Russia (140) and Canada (76).

In aggregate, the people on the list are worth $16.1 trillion, or roughly 1/30th of what everyone else on the planet owns, combined, and commentators were quick to point out that these super-wealthy individuals pay taxes, in aggregate, at about a 4% annual rate.

Some observers were quick to point out that the growing income inequality at the very top of the wealth spectrum, where 1% of all citizens own more than half of all wealth, is a bit of an aberration in the natural world. One research report explored the implications of a recent Facebook post: “If a monkey hoarded more bananas than it could eat, while most of the other monkeys starved, scientists would study that monkey to figure out what the heck was wrong with it. When humans do it, we put them on the cover of Forbes.”

Even so, the global economy seems poised to continue to bring new people across the $1 billion net worth threshold at an increasing rate. And many of them will be Americans.

Download a PDF version of this article below.

 

Sources:
https://taxfoundation.org/research/all/federal/big-beautiful-bill-house-gop-tax-plan/
https://independentsector.org/blog/so-whats-in-the-house-tax-reform-bill/
https://www.americanactionforum.org/insight/the-house-ways-and-means-committees-tax-bill/
https://www.cnbc.com/2025/05/14/stock-market-today-live-updates.html
https://www.brookings.edu/articles/what-does-the-us-uk-deal-mean-for-trumps-trade-agenda/
https://www.forbes.com/billionaires/
https://en.wikipedia.org/wiki/List_of_countries_by_number_of_billionaires
https://www.globalcitizen.org/en/content/wealth-inequality-oxfam-billionaires-elon-musk/
https://medium.com/@marcus_78785/bananas-and-billionaires-unpacking-the-paradox-of-wealth-in-the-human-world-2ab1a15e50

 

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