Donald Trump passed a major act this Fourth of July. The “Big Beautiful Bill” was signed into law on July 4, 2025 and it has many effects on American society.
To start off, a portion of the bill addresses tax cuts. A tax cut reduces the amount of money a person has to pay in taxes. In some cases tax cuts are a good thing. Many people with lower-paying jobs will benefit from the bill.
For example, under the “Big Beautiful Bill,” wait staff do not have taxes on their tips. This means that all the money they make from tips is theirs, and they will have no extra fees to pay out of them. This is beneficial since the minimum wage for wait staff is $2.13, a wage that has not been raised in decades, so most of the income comes from tips. This bill theoretically allows wait staff to save more money.
People who are paid by the hour also will benefit from these new tax cuts. Just like the tips, there is no tax on overtime. This means all the money that one makes during overtime is theirs to keep.
Businesses also benefit from these tax cuts. Enhanced Pass Through Deduction has increased to 20% higher phase out limits. This reduces a businesses taxable income. Taxable income is the part of one’s salary that immediately goes towards taxes. This creates less taxes for businesses and the people running them.
Now, both entrepreneurs and working-class people are getting tax cuts. However, the entrepreneurs are getting significantly more tax cuts than the working class people, even though the entrepreneurs have way more money. Both groups are getting tax cuts, but the wealthier ones are getting to save the most money.
Why does this matter? Well, this allows entrepreneurs to gain significantly more money, while the working-class is getting a tiny percentage of that. Upper class taxes are decreasing drastically, which allows them to stay rich. Lower tax brackets are getting cuts, but not enough for them to gain significant amounts of wealth.
Another big change from the “Big Beautiful Bill” are Trump Accounts. Trump Accounts are for children born in the years 2025-2029. When the account is started, the government will deposit $1,000 into the account. After that, the parents are free to deposit money into the account until the child is 18. Once the child is 18 they are able to access the account for things like college and house payments. Once the child is 30, they get full access to the account. There are no taxes on these accounts, and the interest rates are 0.5%.
However, there are some restrictions. If the guardians of the child have a yearly income of $300,000 or higher, the government does not deposit the initial $1,000. For single guardians the max is $150,000. If someone withdraws money from the account to use for non-qualified expenses before the child turns 18, they have to pay the tax and a 10% penalty.
Food stamps are also impacted by this bill. The Thrifty Food Plan is frozen until 2027. The Thrifty Food Plan was the way the government determined how much food assistance families received. This means that the money on the cards received is less than it has been. Nothing can be done about this freeze until 2027, even if the board of Supplemental Nutrition Assistance Program (SNAP) wanted to. This means that all the damaging impacts that this bill invokes on the program cannot be changed in the near future.
Work requirements are also changed for people asking for assistance. Instead of the retirement age being 54, it is now 65 which is nine more years of work. If a person between the ages of 18 and 65 does not work, train or volunteer 80 hours a month they lose benefits.
Finally, the “Big Beautiful Bill” enacts the reduction of Medicaid. Before this bill, work was not required for people on Medicaid. Now people have to work to be eligible for health insurance. The government is also reducing the amount of money given to Medicaid.
Currently, the government covers 50% of Medicaid administrative costs. By 2027, they will only be covering 25%. Implementing restrictions on Medicaid will mean many people will lose their health insurance.This means that they can not afford to get the medical attention and care they need.
Many people are wondering where the money currently slated for Medicaid is going. By defunding Medicaid the government is passing those savings onto the wealthy as part of their tax cuts. and many other policies that benefit the American people, it is giving more money to the rich.
These are just some of the major changes that the “Big Beautiful Bill” brings to America. There are so many more bills and laws that are being proposed in the House and Senate. Updates on the “Big Beautiful Bill” and other acts are constantly being made. Knowing what is going on in the United States can help set up knowledge and change for future generations to come.
