A: The One Big Beautiful Bill Act, signed into law on July 4, is a landmark 900-page tax and spending bill with a projected 10-year cost of $3.25 trillion, making it the most expensive legislation in U.S. history. According to the Congressional Budget Office (CBO), this figure stems from $4.46 trillion in tax cuts offset by $1.21 trillion in spending reductions. The fiscal impact is heavily front-loaded, with economic stimulus peaking in 2027 due to immediate tax relief. However, delayed spending cuts could create a fiscal cliff around 2029–2030, especially if Congress extends temporary provisions, which is historically common. Despite its scale, the bill is expected to have only a minimal effect on long-term economic growth, with the Joint Committee on Taxation estimating a mere 0.03% increase in average annual GDP growth over the next decade.
Key provisions include the permanent extension of 2017 income tax cuts ($3.6 trillion), expansion of the child tax credit ($817 billion), and a temporary increase in the SALT deduction cap to $40,000 ($163 billion). Other notable changes include immediate R&D expensing for businesses ($141 billion), a temporary senior deduction ($93 billion), and a new charitable contribution deduction for non-itemizers ($74 billion). Additionally, a tip income deduction and an enhanced semiconductor tax credit aim to support workers and domestic manufacturing. On the savings side, the bill accelerates the phase-out of clean energy tax credits ($444 billion) and imposes stricter work requirements for SNAP and Medicaid recipients, projected to save over $1 trillion. While the legislation touches nearly every American—through tax relief, deductions, or public assistance changes—it raises concerns about long-term fiscal sustainability. If temporary provisions are extended, the deficit impact could grow significantly, making future budget discipline a key issue for policymakers and investors alike.
Changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors we are not qualified to render advice on tax or legal matters. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.