What will Americans gain and lose now that the "Big and Beautiful Act" is settled?

The U.S. House of Representatives has finally passed President Trump's massive tax and spending bill, which will affect nearly all groups, including the elderly, students, taxpayers, children, parents, and low-income individuals.

Screenshot from CNN report

The Senate version differs from the version passed by the House in May in several key areas. Ultimately, both the Senate and the House must approve the same version in order to send the package to Trump for signing before the July 4 deadline.

The massive legislation finally passed again in the House on Thursday. It will extend the tax cut policies from Trump's first term, provide funding for the border wall, and offset some of the revenue losses and new spending by cutting federal support for social safety net programs—namely, the welfare programs that help Americans afford food and health insurance.

The following is a summary from CNN of the potential impacts of the legislation on various groups:

Medicaid beneficiaries: Millions may lose insurance

Many people who rely on Medicaid will face new work requirements. Certain healthy adults aged 19 to 64 who are added to the program through expanded Medicaid policies must work, volunteer, attend school, or receive job training for at least 80 hours each month. This requirement also applies to parents with children aged 14 and older.

In addition, due to the reduction in federal funding received by various states, insured individuals may also face issues such as benefit cuts, stricter enrollment requirements, and complicated application procedures. The bill will also delay the implementation of two provisions aimed at simplifying enrollment and renewal processes by the Biden administration.

According to an analysis released by the Congressional Budget Office (CBO) on July 2, in the assessment prior to the implementation of the final version of the bill, approximately 12 million people are expected to lose insurance by 2034, with most losing coverage due to provisions related to Medicaid.

State Government: Increased Financial Pressure

State lawmakers will have to make tough choices in response to the reality of significant cuts to federal assistance programs such as Medicaid and food stamps. They may choose to control costs by limiting benefits or raising insurance enrollment thresholds, or by cutting spending in areas such as education and infrastructure.

In addition, the bill will reduce the ability of state and local governments to levy taxes on healthcare institutions, especially hospitals, which are an important source of state revenue. States will also be required to cover part of the costs of food stamps and bear more administrative expenses.

Taxpayers: May be difficult to perceive the continuation of tax cuts

Most taxpayers will continue to benefit from the individual income tax reduction provisions in the 2017 Trump tax reform bill, including lower tax rates and nearly doubled standard deductions. The current bill will make these provisions permanent.

However, since this tax reduction policy has been in effect since 2017, many people may not notice the changes. However, some taxpayers will benefit from the increased child tax credit, temporarily relaxed limits on state and local tax deductions, and other new tax reduction policies.

The analysis from the Tax Policy Center indicates that the average tax burden for families will decrease by $2,900, but the extent of the tax cut varies by income.

Seniors: Will receive short-term tax relief

From 2025 to 2028, the standard deduction for seniors will increase by $6,000, but this benefit will be gradually phased out for individuals with an annual income exceeding $75,000 or couples with an annual income exceeding $150,000.

However, low-income elderly individuals who rely on both Medicare and Medicaid may be negatively affected by cuts to the latter, including losing assistance to help pay premiums and out-of-pocket costs, or being unable to continue receiving long-term care and dental services.

Student Loan Borrowers: Major Policy Adjustments

The bill will set new caps on federal student loans available to graduate students and their parents, while also reducing opportunities for deferring or postponing loan repayments. The loan eligibility for part-time students will also be restricted, and repayment options will become more limited, discontinuing the loan forgiveness policies established during the Biden administration.

Car Buyers: Interest Expenses Are Tax Deductible

For consumers taking out loans to purchase new cars manufactured in the United States, the bill will allow them to deduct up to $10,000 in loan interest from their taxable income.

But for those planning to buy electric vehicles, this is bad news - the Biden administration's electric vehicle tax credit policy, originally set to last until 2032 with a maximum of $7,500, will terminate at the end of September.

Parents: Increase in Child Tax Credit

The bill will increase the child tax credit for each child from the current $2,000 to $2,200 and establish it as a permanent policy.

Eligible individuals are single parents with an annual income of no more than $200,000 and married couples with an annual income of no more than $400,000. The credit amount for high-income families will gradually decrease.

However, some parents with children aged 14 and above may lose government assistance such as medical aid or food stamps if they do not meet work requirements.

Workers receiving tips or overtime pay: temporary tax reduction

By 2028, many workers receiving tips or overtime pay will benefit from tax reductions.

• Employees in traditional industries who receive tips can deduct up to $25,000 in tip income from their federal income tax.

• Employees with overtime pay can deduct up to $12,500 of their overtime income.

However, high-income workers with an annual income exceeding $160,000 in 2025 will no longer be eligible.

Immigration: Welfare eligibility tightened significantly

The bill will restrict the eligibility of certain non-citizens for federal benefits, including food stamps, Medicaid, insurance subsidies under the Affordable Care Act, and Medicare.

Certain immigrant groups, such as refugees, asylum seekers, and victims of domestic violence and human trafficking, will lose their eligibility for the aforementioned benefits.

In addition, immigrants will face new or higher application fees when applying for asylum, work permits, humanitarian parole, and temporary protected status, as well as when filing applications with immigration courts.

Rich people: Overall benefit more

According to relevant analysis, wealthy Americans will gain far greater tax reduction benefits from this legislation than those in the middle and lower-income groups.

Although all households will benefit from tax cuts, families with incomes above $217,000 (the top 20%) will account for 60% of the beneficiaries of the tax cuts. By 2026, they will receive an average tax cut of $12,500, which represents 3.4% of their after-tax income.

In comparison, households with an annual income of $35,000 or less receive an average tax cut of only $150, which accounts for less than 1% of their after-tax income; while the average tax cut for middle-income households is $1,800, making up 2.3% of their after-tax income.

This analysis does not take into account the cuts to the national social safety net programs, which are crucial support for low-income families. According to a report from the Yale University Budget Lab, after considering the changes in Medicaid and food stamps, the overall income of low-income families will decrease.

Millionaire Unemployed: Will Not Be Eligible for Unemployment Benefits

Unexpectedly, according to a report by the Congressional Research Service, thousands of Americans with annual incomes exceeding $1 million received unemployment benefits in 2021 and 2022. The bill will put an end to such practices.