Big Beautiful Bill Breakdown (Part III)
The following is a breakdown of the Big Beautiful Bill, which was recently signed into law. The bill consists of many implementations and changes for the country. This is part three of an ongoing series.
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The next section of the bill deals with health plans and health savings accounts.
Previously, there were restrictions placed on health plans and health savings accounts so that employer reimbursements were often excluded from health plans and employees were prevented from making payments into a health savings accounts if they had a health plan.
The new law opens up access to health plans to small businesses previously excluded, as well as allowing individuals to have both a health plan and a health savings account. Current law also prevented people with high deductible catastrophic health plans from being able to also maintain a health savings account. The Beautiful Bill allows individuals to have both.
Current law prohibits people with discounted workplace clinic access from maintaining a health savings account because their discount is deemed to be a benefit.
The Beautiful Bill allows both. It also allows $500 a year per individual and $1,000 per year per family to be taken from the health savings account and applied to physical fitness and instructional physical activity programs.
Under current law, an individual can't contribute to a health savings account if the spouse maintains a flexible spending arrangement (whatever that is).
Under the Beautiful Bill, the person can still maintain a health savings account even if the spouse is involved in flexible spending. Under current law an individual may contribute up to $4,300 annually and up to $8,550 per family. The Beautiful Bill doubles those figures.
A section of the Beautiful Bill is designed to help rural America. Under the old law, for example, people buying property to help create jobs and prosperity were allowed to gradually expense the cost of that property over a number of years. Under the Beautiful Bill, they can deduct 100% of those expenses immediately in the first year.
Under the old law, a person was allowed to expense a property used for research over a five year period domestically and over 15 years if the property is foreign. Under the Beautiful Bill, that same person can expense domestic research property in a single year. The Beautiful Bill also increases taxpayer flexibility on deduction of interest payments and allows factory owners (rather than deducting interest payments over a 39-year period), deducting that interest all at once in the same year. This provides an incentive for opening rural factories. The same rule applies to someone who acquires and rehabilitates a factory that was abandoned.
The Beautiful Bill provides for renewal and enhancement of opportunity zones (low income areas in need of revitalization). This offers investors tax benefits for investing capital gains from other areas into the opportunity zones. Long term investment of these assets may actually do away with said taxes.
The Beautiful Bill repeals the 10% excise on indoor tanning services.
The Bill also allows for expensing up to $150,000 per year of the cost of producing sound recordings in this decade so long as those recordings are made in the United States.
The Beautiful Bill increases low income housing tax credits to bond-financed homes and declares Indian and rural areas to be difficult development areas so they qualify for additional benefits. The bill also increases the gross receipts threshhold on small businesses, allows them to use cash accounting, and also exempts them from a limit on their business interest deductibility.
The Beautiful Bill also changes subsidies of bio-fuels to exempt foreign entities as well as foreign-influenced entities from receiving any of these subsidies. If, for example, the Chinese own the local corn field that produces the corn which is fermented to produce alcohol fuel, the Chinese no longer get any subsidy.
Under current law, the owners of vehicles using clean fuel qualify for subsidies of 30% up to $4,000 per vehicle (if they don't earn over $150,000 per family per year) up until year 2032. Under the Beautiful Bill this subsidy expires December 31st of 2025.
The new car subsidy of $7,500 for the purchase of clean vehicles is likewise set by the Beautiful Bill to expire at the end of this year rather than in 2032. The Beautiful Bill also does the same thing for the subsidizing up to $100,000 of the cost of building electric filling stations. The subsidy now expires this year. No wonder Elon Musk opposed the bill.
That brings us to page 30 of the House's 47 page summary of the Beautiful Bill (now the Beautiful Law). Do you see anything in it that can be construed as cutting the taxes of the wealthy or harming the poor, or devastating rural areas (as the Democrats claim)? Don't miss the next thrilling adventure as we delve into the remaining 17 summary pages.
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Ed. note: If one looks at the reviews done on this new bill by the nonpartisan Congressional Budget Office, the cuts to Medicare and Medicaid are more than a little troubling for some fixed-income seniors and those barely scraping by, thanks to lost jobs, etc. For more on the subject, simply Google: “Congressional Budget Office one big beautiful bill.” Also, whatever happened to those fiscally conservative old-school Republicans who once decried fed budget deficit spending?