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Unpacking the "One Big Beautiful Bill": A Closer Look at Its Economic Impact and the Soaring Debt

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Published by BNN

As the "One Big Beautiful Bill" heads to the President's desk, hailed by its proponents as a victory for American families and businesses, a closer examination of its provisions reveals a more complex picture. While offering some targeted relief, many analyses suggest the bill's most substantial benefits are directed towards the nation's wealthiest, including the President, his associates, and their financial interests, potentially at the expense of lower and middle-income Americans. Moreover, the bill includes significant expenses that are projected to substantially increase the national debt, raising concerns about its long-term economic consequences.

At its core, the legislation makes permanent significant portions of the 2017 tax cuts, which primarily favored corporations and high-income earners. Key provisions within the new bill include:

  • Permanent Reduction in Corporate Tax Rates: A central pillar of the previous tax cuts, this permanence locks in a lower tax burden for businesses. Proponents argue this will spur investment and job creation. However, non-partisan research from the Joint Committee on Taxation (JCT) and the Federal Reserve Board found that workers below the 90th percentile saw "no change in earnings" from the corporate rate cut, while earnings "increased particularly sharply for firm managers and executives." It was noted that nearly half of the earnings gains from the corporate cut flowed to firm owners, with significant portions also going to executives and high-paid workers. [Congress Should Revisit 2017 Tax Law's Trillion-Dollar Corporate Rate Cut in 2025]
  • Estate and Gift Tax Exemption Increase: The bill significantly and permanently raises the amount of wealth that can be passed on tax-free to heirs to an inflation-indexed $15 million per individual (or $30 million for married couples). This provision disproportionately benefits the wealthiest families, allowing multi-generational wealth to transfer with minimal taxation, as only a small fraction of estates are subject to this tax. [How The One, Big, Beautiful Bill proposes to change the gift and estate tax exemption], [“One Big Beautiful Bill Act” House GOP Tax Plan: Details and Analysis]
  • Expanded Pass-Through Business Deduction: Owners of "pass-through" businesses (such as sole proprietorships, S corporations, and partnerships) will see a more generous deduction. While intended to stimulate small businesses, the Tax Law Center states that proposed modifications would make it "more generous and more valuable to higher-income people, especially those in certain industries including lawyers and lobbyists," with JCT estimating that "61%...goes to the top 1% of income earners." The Tax Policy Center further notes that while about 10% of middle-income households might claim this deduction, 43.5% of households in the top 1% will. For the top 1%, this deduction could increase their average after-tax income by approximately $32,000. [Ways and Means proposes making costly 199A “pass-through” deduction more generous and valuable to high-income earners], [Who Benefits From The Pass-Through Business Tax Deduction? - Tax Policy Center]
  • Increased State and Local Tax (SALT) Deduction Cap: The bill increases the cap on deductions for state and local taxes to $40,000 for many taxpayers. However, analyses from the NYC Comptroller's Office and the Bipartisan Policy Center indicate that this primarily benefits "six-figure households in high-tax states." Low and middle-income households are unlikely to benefit significantly, as most do not have high enough state and local tax liabilities to reach the current or proposed cap. [The SALT Deduction in the House Budget Bill - New York City Comptroller], [How Would the 2025 House Tax Bill Change the SALT Deduction?]

While proponents highlight new temporary deductions for tips, overtime pay, and auto loan interest, along with a modest increase in the Child Tax Credit, the overall economic modeling suggests a significant tilt. Analyses by the Institute on Taxation and Economic Policy (ITEP) project that "more than 70 percent of the net tax cuts would go to the richest fifth of Americans," with less than 1% going to the poorest fifth. [Analysis of Tax Provisions in the Senate Reconciliation Bill: National and State Level Estimates - Institute on Taxation and Economic Policy]

The Mounting Price Tag: Impact on National Debt

Beyond its distributional effects, a critical concern surrounding the "One Big Beautiful Bill" is its projected impact on the national debt. According to various non-partisan analyses, the bill's provisions are set to significantly increase federal borrowing:

To offset a fraction of these costs, the bill includes substantial spending reductions, reportedly targeting critical safety net programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP). KFF reports that the bill would cut federal health program spending by "more than $1 trillion over the next decade," including significant amounts from Medicaid and ACA Marketplaces. The Congressional Budget Office (CBO) estimates that households in the lowest income decile could see a 4% decrease in resources primarily due to changes in Medicaid and SNAP. The Commonwealth Fund projects that these cuts could lead to the loss of 1.22 million jobs nationwide and a $154 billion reduction in state GDPs by 2029. [The Implications of Federal SNAP Spending Cuts on Individuals with Medicaid, Medicare and Other Health Coverage | KFF], [How Medicaid, SNAP Cutbacks Would Trigger Job Losses Across States | Commonwealth Fund]

Consequences of a Rising National Debt for Average Americans

The economic impacts of a significantly increased national debt are not abstract; they can directly affect the daily lives of lower and middle-class Americans:

  • Higher Interest Rates and Reduced Investment: As the national debt grows, the government must borrow more, competing with private businesses for available capital. This "crowding out" effect can lead to higher interest rates for loans, including mortgages and credit cards, making borrowing more expensive for consumers and businesses. It can also stifle private investment and innovation, potentially leading to slower economic growth and fewer job opportunities. [New Report: Rising National Debt Will Cause Significant Damage to the U.S. Economy]
  • Inflationary Pressures: A large national debt, particularly if financed through increased money supply, can contribute to inflationary pressures. Rising inflation erodes purchasing power, making everyday goods and services more expensive. This disproportionately harms low-income households whose incomes may not keep pace with rising prices. [The Economic Impact of High National Debt]
  • Cuts to Essential Services: When a larger portion of the federal budget is consumed by interest payments on the debt, less funding is available for critical public services like education, infrastructure, and healthcare. This can lead to deteriorating quality of public services and reduced support for vulnerable populations, potentially requiring tax increases in the future to cover the gap. [Our National Debt - Peterson Foundation], [The Economic Impact of High National Debt]
  • Lower Wages: Analyses project that unchecked national debt can lead to decreased wages over the long term. For example, a report by EY for the Peter G. Peterson Foundation projects that rising debt could reduce annual wages by 5.3% by 2075 compared to a stabilized debt scenario. [New Report: Rising National Debt Will Cause Significant Damage to the U.S. Economy]

President Trump campaigned on a platform of "Make America Great Again," promising to champion the forgotten men and women of America and to fight for the working class. Yet, the current legislation appears to align more closely with the interests of the nation's financial elite. The argument that these tax cuts will "trickle down" to benefit everyone has been a recurring theme in economic policy. However, as noted by Investopedia, a London School of Economics report examining five decades of tax cuts in 18 wealthy nations found they "consistently benefited the wealthy but had no meaningful effect on unemployment or economic growth." [Trickle-Down Economics: Theory, Policies, and Critique - Investopedia]

As this bill becomes law, it leaves many questions for the average American, regardless of their political affiliation:

  • If the goal is to make America great again, are these the kinds of policies that truly empower the working class and strengthen the middle income, or do they primarily serve to further enrich those already at the top?
  • When substantial tax breaks for the wealthiest are paired with significant cuts to essential services for the most vulnerable, and a projected multi-trillion-dollar increase in the national debt, does that align with the promise of a government that serves all its citizens?
  • For those who believe in fiscal responsibility, how do we reconcile massive tax cuts that add trillions to the national debt with the long-term economic health of the nation, and the potential for higher interest rates, inflation, and cuts to vital programs down the line?
  • And for devout supporters, does a bill that appears to disproportionately benefit the wealthy, including the President's own circle, while significantly expanding the national debt, truly represent the "America First" principles they were promised?