US House Passes Trump-Inspired Tax Bill Locking Permanent Cuts, Expanding Exemptions

President Donald Trump's 2025 tax legislation, dubbed the “Big Beautiful Tax Bill,” introduces a range of permanent and temporary tax cuts that largely benefit middle- and upper-income households while providing limited relief to lower-income groups. Central provisions include locking in the 2017 income tax rate cuts, significantly raising the estate tax exemption to $15 million per individual, and creating a new tax exemption for tipped income up to $25,000 through 2028, inspired by a waitress's complaint during Trump's 2024 campaign. The bill extends and expands various business tax breaks, including deductions for pass-through entities and research and development, and introduces new deductions like a “senior deduction” to help older Americans avoid Social Security taxes. While about 85% of households will receive a tax cut initially, analyses project that by 2030 only 70% will benefit, with nearly 60% of the tax advantages going to the top income quintile, raising concerns about equity as social welfare cuts partly offset gains for lower earners. Additionally, the legislation upgrades 529 education savings plans by doubling the allowable annual withdrawals for K-12 expenses and expanding qualified expenses to include tutoring, testing fees, and professional credential costs, making these plans more versatile for families. Overall, the bill reflects a shift toward populist appeals within the Republican tax agenda while maintaining significant advantages for wealthier Americans and businesses.