Everything You Need to Know About Trump’s New Tax Bill

They say everything’s bigger in America, and apparently, that includes tax bills. President Trump’s recently passed House legislation, officially dubbed the “One Big Beautiful Bill,” promises deep tax cuts, a shower of economic incentives, and a mountain of controversy. With a razor-thin House passage (215–214), critics and cheerleaders alike are lining up to argue over whether this mega bill is a dream come true or a fiscal facepalm waiting to happen. But this time, it’s not just Democrats making noise. Even Elon Musk—one of Trump’s biggest donors last cycle- is criticizing the bill. Markets are spooked. And if you thought the deficit was yesterday’s problem, think again. Let’s break down the highlights (and lowlights) for tax professionals, CFOs, and finance buffs who’d rather not dig through hundreds of amendments at 3 a.m. like Congress did.

A Tip of the Hat (and the Tax)

Let’s start with the crowd-pleasers. The bill includes zero federal tax on tips and overtime pay through 2028. Yes, you read that right—waitstaff, bartenders, and gig workers can finally keep every hard-earned buck from that extra shift, at least until the next election cycle. The Senate even fast-tracked its version of this “No Tax on Tips” Act with unanimous consent, something rarer than an audit-free year. But before you high-five Uncle Sam, know this: both versions will need to match exactly before they hit Trump’s desk. And if you’re wondering whether Congress read every page of this tax novel before voting—spoiler alert—they didn’t.

The bill also births the so-called Trump Accounts—$1,000 starter investment accounts for every American newborn from 2025 to 2028. Parents can throw in up to $5,000 annually, but don’t expect a 529-level tax bonanza. The accounts grow tax-free but are taxable upon withdrawal unless used for college, a first home, or starting a small business. They’ll also self-destruct (well, disburse) by age 31. So, yes, free money, but financial advisors are already raising red flags. With limited advantages and lots of restrictions, the Trump Account might be the “sixth-best” tax shelter on the market. Ouch.

The PCAOB, SALT, and an Energy Pivot

One of the bill’s sleeper provisions? Axing the Public Company Accounting Oversight Board (PCAOB) and transferring its duties to the SEC. Critics say this is like asking your barber to handle your dental work. It’s doable, but not ideal. PCAOB Chair Erica Williams called it a “significant risk to investors,” while former officials warned the SEC couldn’t just “copy-paste” 20 years of specialized oversight. If passed, this move would unravel Sarbanes-Oxley safeguards faster than you can say Enron.

For high earners in blue states, there’s some relief: the SALT deduction cap jumps to $40,000 (phased out above $500k income). But if you’re in the renewable energy business? Yikes. The bill guts clean energy tax incentives, axes EV credits by 2026, and boosts fossil fuel development, with a new mandate for 30 Gulf of Mexico oil leases. Or, as Trump now prefers to call it, the “Gulf of America.” Meanwhile, university endowments and private foundations get hit with escalating taxes, up to 21% for elite colleges and 10% for mega-charities like the Gates Foundation. Harvard, MIT, and friends won’t be thrilled.

The Revenge Clause

In an unexpected turn, the bill also includes a “revenge tax” on nations with digital services taxes that target U.S. tech firms, like Canada, the UK, and France. Under Section 899, foreign investors from these countries could face a tax hike on U.S. dividends, royalties, and interest income, up to 20% above statutory rates. Legal scholars are crying foul over the treaty violations. Canadian investors alone could cough up an extra $59 billion in taxes. Critics say this could spark a global tax war. The Global Business Alliance warns the fallout will hit U.S. workers and credibility, not just foreign governments. And that’s before we talk about central banks and pension funds potentially losing tax-exempt status on U.S. holdings.

The Deficit Elephant in the Room

Of course, all these tax cuts come at a price. According to the nonpartisan CBO, the bill’s giveaways will inflate the deficit by $3.8 trillion over a decade, while cuts to Medicaid and food stamps only chip away $1 trillion. Even Trump’s former government efficiency czar, Elon Musk, is calling foul. In an interview with CBS, he said the bill “undermines the work the DOGE team is doing” and added: “A bill can be big, or it can be beautiful. But I don’t know if it can be both.” Musk, who claimed his DOGE team saved $175 billion (a number widely questioned), is now backing away from politics and donations.

Meanwhile, the Committee for a Responsible Federal Budget projects the U.S. debt-to-GDP ratio will hit 125% by 2034, up from 98%. The deficit as a percentage of the economy is expected to rise to 6.9%. Bond yields are rising, and financial markets are sending a clear signal—they don’t believe the “this will pay for itself” pitch.

Everyone Gets a Slice

Not everything in the bill is flashy. There’s a $4,000 standard deduction for seniors. Auto loan interest becomes deductible. Pass-through businesses get an extra 3% income exclusion. And R&D tax deductions are back through 2029—good news for tech and pharma. Also buried in the bill? A failed attempt to repeal the indoor tanning tax, which somehow still made it into the Congressional Record… without surviving the final vote. You can't make this stuff up.

Immigrants sending money abroad face a new 3.5% remittance tax, though U.S. citizens can get credits for similar payments. Food stamp eligibility now requires work up to age 64 (up from 54). And while Trump had promised to end taxes on Social Security, the budget rules blocked it. Instead, seniors get that boosted deduction. Still, 51.8% of retirees depend on Social Security for over half their income, so this issue isn’t going anywhere, especially with the 2026 campaign season lurking.

The Experts Views

The Upside

• Scott Bessent, Treasury Secretary, predicts U.S. GDP growth will exceed 3% in the next year, driven by deregulation and tax relief.
• Michael Faulkender, Deputy Treasury Secretary, calls the bill a reset that strengthens America’s fiscal footing.
• Speaker Mike Johnson says it stops historic tax hikes and puts more money in working Americans’ hands.
• Small business advocates and manufacturers: Applaud provisions like 100% depreciation for factories and the enhanced pass-through deduction.
• Voters may welcome highly visible perks like the child credit bump, tax-free tips, and senior deductions.

The Downside

• Phillip Swagel, CBO Director, warns that the poorest households will lose resources, while the richest gain.
• Penn Wharton Budget Model Projects lower disposable income for the bottom 40% by 2026.
• Christopher Waller, Fed Governor, says markets are reacting rationally to the bill’s “fantasy math.”
• Joseph Thorndike, Tax Analysts, argues that the idea that tax cuts “pay for themselves” has no basis in economic or historical evidence.
• Global trade advocates: Fear Section 899 could backfire, damaging U.S. investment appeal and treaty credibility.

So, What’s Next?

The Senate’s already hinting at major rewrites. Expect a standoff on Medicaid, energy provisions, and global tax retaliation. Trump’s hoping to sign this into law by Independence Day—because nothing says "freedom" like overhauling 40% of the tax code. But behind the scenes? Financial markets are jittery, global allies are weighing retaliation, and even longtime Trump supporters are asking: Was this too much too fast? There’s a reason tax professionals are gulping down extra coffee this week. The One Big Beautiful Bill touches everything from Social Security and child savings to climate policy and global diplomacy. It might deliver some wins for workers, families, and businesses, but it also comes with red tape, political landmines, and a deficit the size of Jupiter. So, grab your tax software (or your favorite CPA) and stay tuned. This bill’s journey is just getting started. Subscribe to our newsletter for deep dives, trend breakdowns, and practical insights, served with a side of straight talk.