The Biggest Redistribution of Wealth… but in Favor of the Wealthy
America just can’t catch a break with its White House tenants.
They keep electing spendthrifts, each more willing than the last to mortgage the future of unborn generations for short-term popularity.
Just when it seemed like “no one spends more than Biden,” Trump proved early in his term that spendthrifts come in neither red nor blue — they are colorless. While former President Joe Biden added $4.7 trillion to the budget deficit over four years, Trump added $4 trillion in just five months with a single signature on one bill — with projections it could grow to $6 trillion.
Even Washington isn’t what it used to be. Republicans once seriously worked on aligning taxes with spending, worried about economic distortions, tax simplicity, and expanding the fiscal base. Now, as national populists, they’re fixated on tax cuts without fiscal discipline or safeguards (i.e., government waste).
Democrats aren’t much better — seeking to vastly expand the power and reach of the state while pretending that only billionaires will foot the bill for all the spending. Unfortunately for U.S. taxpayers, both sides are wrong. Their budget math is poor (as shown by rising deficits and debt), and the morality of reckless spending is deteriorating.
“One Big Beautiful Bill” confirms this.
The Center for American Progress calculated that a married couple on Medicare with an annual income of $21,000 would see their out-of-pocket medical costs increase by $8,340.
Obsessed with empty symbolic timing, Trump pushed Congress to hastily pass his “Big Beautiful” bill so he could sign it on Independence Day. Budget analyst Dominic Lett of the Cato Institute, who studies how unchecked federal spending and rising debt shape economic and public policy outcomes, used this symbolism against Trump, stating: “True independence means freeing future generations from crushing debt, not celebrating while handing them a bill that wrecks the budget.” Symbolism, it seems, can backfire.
For Trump, the “One Big Beautiful Bill” is the cornerstone of his economic policy — a presidential manifesto encoding his tax and spending agenda that defines his second term.
Experts say the “Big Beautiful” bill will cost taxpayers more than Trump’s first-term COVID relief bill, more than Biden’s comparable legislation, more than Trump’s first-term tax cuts, more than George W. Bush’s tax cuts, and more than Obama’s stimulus packages. It will even surpass the Affordable Care Act in terms of budget impact.
What kind of bill has such an absurd name?
Its full name is “The One Big Beautiful Bill Act” (OBBBA or simply OBBB). Essentially, it’s a budget reconciliation act that extends Trump’s 2017 tax policies — unfinished business aimed at making those cuts permanent.
White House spokesperson Karoline Leavitt wrote on X that “the president’s ‘One Big Beautiful Bill’ delivers a commonsense agenda, represents the biggest middle-class tax cut in history, ensures permanent border security, significantly boosts military funding, and restores fiscal stability.”
Experts were ruthless. OBBBA is already being called one of the most controversial fiscal packages in Western history — a fiscal disaster, a policy horror show, a big bad ugly bill. The Economist compared it to a chimera: the body of Reaganism (small government) grafted with the head of populist Trumpism (unfettered spending). This creature, they warn, will haunt the U.S. economy for at least a decade.
Veronique de Rugy, a researcher at the Mercatus Center at George Mason University, called it a fiscal monstrosity and compared it to rejoicing over freshly painted walls in a burning house. “Tax cuts are great — if Congress cuts spending too, which this bill doesn’t,” she noted. Former Treasury Secretary Larry Summers said no serious economist would view the bill as beneficial: “It’s a pile of massive debt dumped on the economy — more than any tax legislation we’ve ever had.”
What does the “Big Beautiful Bill” include?
- Permanently extends the lower tax rates Trump signed in 2017 (set to expire end of 2025), including a 37% top rate for high earners and a 10% rate for low earners.
- Raises the SALT (state and local tax) deduction cap from $10,000 to $40,000, returning to $10,000 in 2030.
- Raises the lifetime gift and estate tax exemption to $15 million (from $13.99M) for individuals and $30 million (from $27.98M) for married couples.
- Increases the child tax credit from $2,000 to $2,200 per child starting in 2025 and makes it permanent.
- Eliminates taxes on tips and overtime pay.
- Gradually phases out tax credits for wind, solar, and other renewables (from Biden’s Inflation Reduction Act), and promotes fossil fuels instead.
- Eliminates tax credits for electric vehicles (up to $7,500) that were meant to last until 2032.
- Cuts Medicaid (healthcare for low-income Americans) spending by just over $1 trillion (12%).
- Expands work requirements for SNAP (food stamps) recipients.
- Adds $150 billion in military spending.
- Adds $150 billion for border control and deportation (making ICE the best-funded law enforcement agency).
- Raises the debt ceiling by $5 trillion.
- Plans to cover costs via increased customs revenue ($2.5 trillion).
Some research centers and critics say OBBBA serves only the wealthy and has created the largest upward transfer of wealth in U.S. history. Its most prominent (and loudest) critic is businessman and innovator Elon Musk, who hit the core issue succinctly: “The bill can be either beautiful or big. It can’t be both.”
Impact on education and student debt
The bill will raise annual student loan repayments by $2,929 for the average graduate borrower.
The Penn Wharton Budget Model shows that the top 0.1% of earners will gain an average annual tax benefit of $296,160. The top 1% will retain $78,650 per year, while the poorest 20% of households will receive just $160 in annual tax relief.
By contrast, the respected Tax Foundation claims OBBBA will prevent tax hikes for 62% of taxpayers — not an insignificant figure.
Some critics focus on Medicaid cuts, arguing this will destabilize the healthcare system. The Congressional Budget Office (CBO) estimates that 10.9 million Americans will lose health insurance due to the bill.
The Center for American Progress estimates that a retired couple on Medicare earning $21,000 a year will see out-of-pocket medical costs increase by $8,340. A study in the Annals of Internal Medicine estimates that the bill will cause:
- 1.9 million people to lose their primary care doctors,
- 1.3 million to miss needed medications,
- 380,270 women to skip mammograms.
Macroeconomic impact
The Tax Foundation estimates the bill will add $4.3 trillion to the deficit ($3.3T primary deficit + $1T interest costs).
The House Budget Committee expects the deficit to increase by more than $5 trillion. Dominic Lett believes — accounting for realistic growth, interest rates, congressional waste, and immigration — the deficit could grow by $6 trillion over the next decade.
Penn Wharton’s numbers again show the wealthiest 0.1% will gain an average $296,160 in tax breaks annually.
The CBO and Joint Committee on Taxation (JCT) estimate that debt will reach 124% of GDP by 2034 — up from 117% projected earlier in 2025. That’s a 7% increase due to OBBBA.
CBO predicts modest GDP growth due to the bill — an average 0.5% increase from 2025–2034, peaking at 0.9% in 2026. The Tax Foundation is more optimistic, forecasting 1.1–1.2% long-term growth from increased investment, wages, and jobs.
CBO also expects interest rates on 10-year Treasury bonds to rise by 14 basis points (0.14%) due to the bill.
Private investment could rise 1.2% by 2027 (peaking early), with total capital stock rising 0.7%, according to the Tax Foundation. But CBO warns that after 2030, investment effects could turn negative as key provisions expire — worsening further by 2054.
The House Budget Committee expects 1.5 million more jobs as a result of the bill. The Tax Foundation predicts pre-tax wages will rise by 0.4% and working hours will increase by 938,000 full-time equivalents. CBO expects small positive effects on overall productivity.
For Trump, the “One Big Beautiful Bill” is the cornerstone of his economic policy — a presidential hallmark containing the algorithm of tax and consumer policy that forms the core of his second presidential term.
As for inflation, the Congressional Budget Office (CBO) estimates that by 2030 it will slightly increase from the January forecast (2.3%) and will peak in 2027, when OBBBA will raise the already estimated inflation rate of 3.2% by 0.12 percentage points. According to that estimate, the bill would not affect inflation after 2030.
When it comes to the reaction from business circles, the most striking came from Elon Musk, who said the bill “hands out charity to the industries of the past while seriously harming the industries of the future,” which reignited a public feud with President Trump. Other major “players” in the business world have so far remained silent, but some think tanks and business associations are ready to offer praise for the “Big Beautiful” bill.
For example, the Tax Foundation (generally critical of many parts of the bill) claims that OBBBA significantly simplifies the tax process for millions of taxpayers, introduces smart tax cuts and revenue increases, and provides taxpayers with the certainty needed to spur long-term investment. The “Big Beautiful” bill frees many American companies operating in international markets from the nightmare of high taxes imposed by some countries on multinational companies based in the U.S.
CNN reports that major corporations are betting they’ll benefit from the bill. Praise is coming from the business sector for Trump, who once again (as in 2017) allowed companies to fully deduct equipment costs in the year of purchase and to deduct research and development expenses in the year they are incurred. Manufacturers are especially pleased that OBBBA brings significant changes to how U.S. tax law treats the construction of new production facilities, allowing them to immediately and fully deduct construction costs.
The bill increased tax credits for companies that produce semiconductors and build manufacturing plants in the U.S. The National Federation of Independent Business (the leading lobbying group for small businesses) praised the “Big Beautiful” for permanently introducing a special deduction (increased from 20% to 23%) for owners of certain pass-through entities (small businesses and partnerships formed by lawyers, doctors, and investors) who pay business taxes on their individual tax returns.
OBBBA is already being talked about as one of the most controversial fiscal packages in Western history — a fiscal disaster, a mix of horror, a big bad ugly law.
Suzanne Clark, president and CEO of the U.S. Chamber of Commerce, stated that the bill lays the foundation for sustainable economic growth and strengthens America’s global competitiveness, providing businesses the certainty they need for long-term investments, encouraging productivity, and increasing workers’ wages. Joshua Bolten, CEO of the Business Roundtable, claims that the bill sends a signal that America will remain a top destination for investment, employment, and growth. Jay Timmons, president and CEO of the National Association of Manufacturers, emphasized the importance of making the 2017 tax cuts permanent instead of allowing them to expire at the end of this year.
“If that had happened — and fortunately it didn’t — it would have cost America six million jobs, one million of them in manufacturing, and around $1.1 trillion in damage to our economy. I’m someone concerned about the deficit and firmly believe that the most important thing the government can do is have the right tax policies to encourage economic growth. I understand the negative comments from people who didn’t like some of the bill’s spending provisions. But this is really the first time something has been done on the side of the equation that concerns growth. Think about Reagan’s tax cuts — they were welcome at the time but weren’t especially growth-focused. They were more about putting more dollars in consumers’ pockets, which isn’t a bad thing. The same goes for Bush’s tax cuts earlier this century. This is the first time these tax cuts were designed to accelerate the American economy. And that leads to more investment, new jobs, and tax revenue — which will hopefully ease some of those deficit concerns in the future,” said Timmons in an interview with PBS News.
Jonathan Samford, president and CEO of the Global Business Alliance (a leading association of international companies in the U.S.), believes the bill strengthens a stable tax environment that attracts cross-border capital and global expertise.
And Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council (SBE Council), said the bill “provides the tax certainty and incentives entrepreneurs and small businesses need to compete and thrive in a competitive economy. It gives them the capital and stability for planning and growth and encourages investment in startups, innovation, and local economic development. Entrepreneurs and small businesses will retain more capital in their operations for investing in new equipment, technology, hiring opportunities, and employee support.” Mark Koziel, president and CEO of the American Institute of Certified Public Accountants, believes the bill’s passage is a victory for millions of businesses and taxpayers across America.
Kevin Keane, president and CEO of the American Beverage Association, said the impact the bill will have on the future growth of family-owned businesses — which form the backbone of American industry — and their workers, who will see growth in well-paying jobs, cannot be underestimated. And James Tobin, president and CEO of the National Association of Home Builders, claims OBBBA is a game-changer: “Most homes in this country are built by small businesses, and this bill will do an excellent job of keeping taxes low.”
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