What exactly is in 'The One, Big, Beautiful Bill?'

This week, I’ve been having an interesting time reading through the 47-page summary of the One Big Beautiful Bill. In spite of the plethora of often maddening abbreviations, the bill (now law) is enlightening. It contains too much to treat in a single column, but let’s at least get a start this week.

The bill begins by significantly cutting taxes while adjusting for inflation. It extends the previous tax cuts that were set to expire at year’s end. In addition it remedies a potential double taxation that could raise an individual’s income tax to a catastrophic 70 percent. While maintaining the lowest reduced taxes at 10 percent, it drops all of the remaining tax brackets (except bracket 7) by from 1 to 4 percent. Bracket 7 remains at 35 percent. The highest bracket is reduced from 39.6 to 37 percent. More importantly for the average taxpayer, the bill nearly doubles the standard deduction that was set to expire at year’s end. This raises the standard deduction for a husband and wife filing jointly from $16,600 to $32,600. This means that a significant number of additional citizens will end up with a tax bill of zero.

The bill also extends the $2,000-per-child tax credit due to be cut in half at year’s end. It further increases that credit to $2,500 while requiring that parents hold a work-eligible Social Security Card. Illegal aliens, in other words, do not receive the free money.

The estate and gift tax exemption is set to expire at year’s end. The bill makes it permanent and allows an exemption of $15 million for an individual and double that per family. The bill also extends the alternative minimum tax exemption and phase-out threshold.

At year’s end, the $20 per month bicycling to work reimbursement exclusion received by employee from employer is set to return. The bill eliminates the exclusion. It also eliminates deductions for moving expenses except in the case of someone in the active military. It also requires that gambling losses not exceed winnings for tax purposes.

The bill reaffirms that the Sinai (as well as Mali, Kenya, Burkina Faso, and Chad) are dangerous places and can cause those stationed there to receive danger pay.

The bill also protects the families of students with loans by not counting freedom from such loans because of death or disability as taxable income.

The bill also includes the much-lauded “no tax on tips” provision. There are, however, certain restrictions on that. The amount of the tip must originate with the tipper and not the tippee. The tippee must not require a certain amount. Barbers and beauticians are added to waiters and servants as individuals expected to receive tips.

There will also be no tax on overtime. That, however, does not apply to very high earners (as defined by government).

This brings us to the one promise the president made to seniors, which he was unable to get through congress. Although he promised an end to taxing Social Security income, congress merely increased the amount of Social Security that is exempt from tax. If your adjusted gross income doesn’t exceed $75,000, your deduction is raised to $4,000. I guess there was just too much money resulting from taxing Social Security for the government to abandon that income stream. The House and Senate did, however, go along with the president’s offer to make interest payments on car loans deductible just so long as the vehicle in question had a least two wheels and was assembled in the United States. Even if you bought a Lamborghini, that huge loan will be deductible.

And with that I’m out of time and printer’s ink. I’ll share the next installment with you in seven days.