The U.S. House of Representatives has unveiled a legislative package dubbed “One Big, Beautiful bill,” a phrase President Donald Trump has now said several times on his various social media accounts or in front of media. The bill attempts to combine several priorities in Trump’s legislative agenda with a clear emphasis on tax cuts.
However, the bill also proposes other initiatives aimed at border security, energy, and spending cuts. If passed, the bill could go down as one of Trump’s landmark pieces of legislation, although it still has to go through the U.S. Senate. Treasury Secretary Scott Bessent has said he would like to see the bill passed into law by July 4. Here are 5 things investors need to know.
1. Five-trillion dollars in tax cuts
Trump and the Republicans have been talking about tax cuts since Trump won the election back in November, and now they have arrived. The first order of business in the bill is to make the 10-year tax cuts passed by Trump in his first term through the Tax Cuts and Jobs Act of 2017 permanent. Some of the more notable items in this bill included lowering individual tax bracket rates anywhere from 1% to 4%, setting a single corporate tax rate of 21%, and increasing the standard deduction.
Other new proposed tax cuts in the bill include a temporary cancellation of federal taxes on tips and overtime wages. The bill also proposes to increase the small business deduction by 3% to 23%; increase the estate tax exemption by $1.4 million to $15 million; incorporate a temporary boost to the standard deduction; temporarily raise the child tax credit by $500 to $2,500; and make changes to the state and local tax deduction cap.
The Joint Committee on Taxation’s (JCT) early estimates suggest that Trump’s plan could cost over $5 trillion over the next decade. Trump has said he plans to fund the bill through tariffs, which remain in a constant stream of negotiations.
Official White House Photo by Joyce Boghosian.
2. Republicans left out a millionaire’s tax
In an idea that likely came as a surprise to Democrats and Republicans alike, Trump through social media floated the idea of increasing taxes on wealthier Americans, suggesting in a Truth Social post that the bill should potentially let tax cuts from his 2017 bill expire for those making between $2.5 million and $5 million. Republicans have vowed to cut spending and lower the fiscal deficit, but it’s not going to be easy if they pass a bill that costs trillions of dollars. However, after floating the idea, Trump later wrote on Truth Social that increasing taxes on the rich may not be such a good political move, and it doesn’t appear to have garnered much interest from House Republicans.
3. Eliminating the electric vehicle tax credit
The legislative package would also eliminate a series of tax credits that promoted the purchase of new and used electric vehicles (EVs). Currently, people purchasing an EV can get a $7,500 tax credit. This would continue through 2026, according to the bill, but starting next year, the credit would only apply to companies that have sold less than 200,000 electric vehicles.
The bill would also get rid of a $4,000 tax credit for used EVs at the end of 2025. The last EV credit the bill targets is a $7,500 one for commercial businesses. The Wall Street Journal estimates that this could have the largest impact because EV companies have used this credit to reduce the cost of leasing an EV, a practice that can account for up to 80% of EV revenue in a month. The Journal estimates that customers pocket an extra couple of hundred dollars per month when they lease an EV due to this credit.
4. Funds for border security
Trump’s immigration policies appear to have garnered support from a majority of the public so far, based on polling. Republicans plan to continue these efforts in the legislative package by allocating over $69 billion to the Department of Homeland Security for various border security initiatives.
Most of the funds, roughly $46 billion, would renew construction efforts on Trump’s wall on the border of the U.S. and Mexico. This was a heated issue during Trump’s first term, and the proposed funds would aim to build 700 miles of “primary” wall and another 900 miles of river barriers, according to the Associated Press. Another $4 billion would be allocated to the hiring of 3,000 new Border Patrol agents.
Elsewhere, the Judiciary Committee, which upholds immigration laws, is seeking $110 billion from the package to deport one-million immigrants per year and be able to hold 100,000 people in detention centers. The funds would be used to hire 10,000 more officers for Immigration and Customs Enforcement (ICE). The Judiciary Committee is also looking to charge immigrants fees for certain immigration-related activities such as seeking asylum or sponsoring children coming into the country. The fees would range from $1,000 to $3,500.
5. Cut spending including potential cuts to Medicaid
Needless to say, Republicans need to find ways to pay for this bill, especially if tariff rates ultimately come down. Earlier this year, the House tasked The Energy and Commerce Committee, which oversees Medicaid, to cut $880 billion in costs over the next decade to help fund the legislative package. Reportedly, they have done just that, according to the Congressional Budget Office (CBO).
This was considered extremely controversial because many presumed that the only way for the Energy and Commerce Committee to come up with these cuts was to slash hundreds of billions from Medicaid, the federal health insurance program for lower-income Americans. According to the Hill, Democrats acquired some analysis from the Congressional Budget Office (CBO), which showed the savings would come largely from health provisions and leave 8.6 million Americans without insurance.
Additionally, the legislative package calls for more reforms to Medicaid, including more stringent income verification and potential work or volunteer requirements for program participants.
