This is the 4th in a series of articles I wrote on the “Big and Beautiful” Tax Bill, which on July 4th with the signature of the President became the “Big and Beautiful” Tax Act.
In my previous articles,  mentioned the advantages and disadvantages of the Act for individuals and families. Let me revisit them once more with the total dollar amount each of these changes will bring.
It may be noted that I wrote this article, based on the provisions of the Act, its analysis by the Congressional Budget Office and the opinions expressed by many experts through Television, print media and internet.

Tax cuts And Job Acts Permanently Extended

The provisions of the Tax Cut and Job Act which are set to expire at the end of the year 2025 is permanently extended. I wrote in detail the provisions of this law in my last article.  It is estimated that this permanent extension will cost the Treasury $4 trillion.

State and local tax deduction (SALT)

SALT deduction is increased from $ 10,000 to $ 40,000 for the households with an annual income of up to $500,000. Though this deduction is set to expire in 2028, this will currently benefit a lot of our families. This will cost the Treasury $142 billion.
No tax on tips, overtime and car loans
There will be no tax on tips up to $ 25,000 and overtime up to $ 12,500. Also, there is a deduction for Seniors up to $ 6000 subject to income limit. Further up to          $ 10,000 can be deducted on American made car loans. All these deductions are at a cost of $ 150 billion.

Child tax credit

The increase of Child Tax Credit from $ 2000 to 2200, though set to expire in 2028 will cost the Treasury $ 100 billion. 
Medicaid cut
About 72 million people in the United States depend on Medicaid for their health coverage. The new act requires able bodied people under the age of 65 to work at least 80 hours per month except for parents of children under 14.
Further it restricts state-levied fees on health care providers that are primarily used to fund Medicaid, especially in underserved communities. Under the new change, the federal government does not have to reimburse States, and as a result, many states will be forced  to lower their existing rates which will be a burden to the States. That would also affect the 41 states that voted to expand Medicaid under the Affordable Care Act.
It is estimated that the Treasury will save $930 billion by the Medicaid Cut.

Defunding Planned Parenthood

The Act cuts off Medicaid funding for entities, notably Planned Parenthood that provide abortions (except in rare cases like rape and incest).   Treasury will save $ 52 Million by cutting Medicaid for abortions.

Medicare cuts

The law places a moratorium on a federal rule designed to help more low-income seniors get assistance with Medicare costs. Medicare Savings Programs use Medicaid funds to help pay for Medicare premiums, deductibles, and other out-of-pocket costs.
About 13 million Americans qualify for both Medicare and Medicaid. These are typically older adults or people with disabilities who have very low incomes. They are adversely affected by Medicaid cuts. Also, for them,  Medicare becomes more expensive and difficult to access.
The law strips Medicare eligibility from certain groups of legal immigrants, even if they have worked and paid Medicare taxes for decades. This affects people with Temporary Protected Status, refugees, and asylum seekers who haven’t yet obtained green cards.
These cuts will save the Treasury about $170 billion.

Obama Care Restrictions

About 50 million Americans depend on Obamacare for their Health Insurance. Though Trump always campaigned for abolishing the Obamacare, it still survived through the “Big Beautiful” Act. However, the new legislation will make it harder to enroll and to retain their coverage.
ACA marketplace policyholders will be required to update their income, immigration status, and other information each year, rather than be allowed to automatically reenroll. More than 10 million people automatically re-enrolled this year. They'll also have less time to enroll; the bill shortens the annual open enrollment period by about a month.

People applying for coverage outside that period either because they lose a job or other insurance or need to add a newborn or spouse to an existing policy will have to wait for all their documents to be processed before receiving government subsidies to help pay their monthly premiums. Today, they get up to 90 days of premium help during the application process, which can take weeks or months.
Further, the enhanced premium subsidies will expire at the end of the year thereby increasing the health insurance premium by 75 %, which will result in a lot of people dropping out of the Obamacare insurance.

As mentioned in my earlier article, cutting Medicaid, Medicare and Obama care will have a very negative impact on the hospitals. Many hospitals may be forced to either close or cut staff and services which will have a negative impact on America’s Health system and may lead to unemployment.  Many people will not be able access the health care they need.
The only ray of hope is the allotment of $ 50 billion to rural hospitals.  

SNAP benefit cuts

The Act institutes more work requirements for people who rely on the Supplemental Nutrition Assistance Program, or food stamps. Able-bodied adults under age 65 would be required to work 80 hours per month with exceptions for those with children under the age of 10.
This cut will save the Treasury about $285 billion.

Rollback of clean energy tax credits

Tax credits for clean vehicles and electricity will be discontinued. The clean vehicle credit will not be available after September 2025. Federal subsidies to wind and solar industries will be discontinued after 2027.
However, they added a new tax incentive for coal production
This will save the Treasury about $488 billion.

Private college endowment tax

The Act establishes a new excise tax on investment income from endowments for colleges with more than 3,000 students. The endowment tax will be  8% for the wealthiest colleges
This will bring a savings of $761 million.

Space program funding

The Act generously supports space programs, including $10 billion for Mars mission priorities, $325 million to de-orbit the International Space Station and $85 million to take the space shuttle from the National Air and Space Museum in the Virginia suburbs of Washington and transport it to Texas.

Why De-Orbit the International Space Station?

Its core structures, specifically its modules, radiators, and central truss are aging. They weaken under the forces of arriving and departing vehicles, orbital reboots, and intense hot and cold cycles as the station travels in and out of sunlight in each orbit. Radiators have been leaking and the efforts to find and patch air leaks have not been successful so far.   However, it may be noted that the International Space Station is jointly owned by space agencies and their contractors from USA, Russia, Europe, Japan and Canada. There must be a total agreement by these countries and agencies to de-orbit the space station.
It will cost the Treasury $ 420 Billion.

Military funding increase

The Act includes $25 billion for a "Golden Dome" missile defense system, $29 billion for shipbuilding and $15 billion for nuclear deterrence.
“The Golden Dome will be an advance Missile Defense System which will “address threats from ballistic, hypersonic, and advanced cruise missiles while leveraging the Hypersonic and Ballistic Tracking Space Sensor network to detect and track threats in real-time. It will include boost-phase interceptors that can destroy missiles during their launch phase, a “Proliferated Warfighter Space Architecture” to coordinate real-time tracking, and non-kinetic defenses such as electronic warfare, directed energy weapons, and cyber capabilities” (internet).
The cost for the Treasury is about $153 billion.

Immigration enforcement

The Act allocates $46.5 billion to build the border wall and associated infrastructure, like access roads, cameras, lights and sensors. The Act also includes $2 billion for the Department of Homeland Security and $29.9 billion for Immigration and Custom Enforcement. The total cost for immigration enforcement is 78.4 billion.

Debt ceiling Increase

The Act has the provision to increase the National debt ceiling by $5 trillion.  It is estimated that the Federal Debt will be 38 trillion by 2030.  The current population of the United States is 342 million. That means each and every one of us carries a debt of more than 100,000 on our head and we are not realizing the seriousness of it. Most politicians who promised and campaigned to lower the National Debt only increased it.

Conclusion

The Trump’s “Big and Beautiful” Act is here to stay at least for the next four years, and we all have to live with that. The Act will help a lot of our young families with income under $ 500,000 and who own a home especially in NY, NJ, CT, IL and CA. The act will help a lot of seniors with family incomes under $ 150,000. It will also help people who have overtime income and those who work in service industries receiving tips.
However, the act will put about 17 million people out of Medicaid, will increase the premium of Medicare and Obama care which in turn will have a negative impact on Hospitals, Nursing homes and clinics. Some hospitals and nursing home may be at the risk of closure which ends up in professionals such as Doctors, Nurses, Physical Therapists etc. to lose their jobs which in turn will increase the unemployment and the economic conditions of many families.
However, this Act will have the potential of an economic boom if the super-rich who are highly benefited from this Act, will invest the money in projects which will create more high paying jobs thereby enhancing the economy.      
Let us wait and see how it will affect each one of us and pray for the betterment of our nation.

P.T. Thomas

Read Part-1: https://www.emalayalee.com/news/346269#gsc.tab=0