The Deduction The One Big Beautiful Bill, Explained
May 20, 2025
Garett Watson, Director of Policy Analysis at the Tax Foundation, joins to dive deep into the House GOP's One Big Beautiful Bill, which seeks to make parts of the 2017 tax overhaul permanent. They discuss who stands to gain the most from this sweeping tax package and the broader economic implications. Watson sheds light on the delicate balance between stimulating growth and managing the national deficit. The conversation also touches on contentious issues like the SALT cap and the potential long-term effects on taxpayers.
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Bill Makes 2017 Tax Cuts Permanent
- The One Big Beautiful Bill aims to make most 2017 tax cuts permanent before they expire in 2026.
- It includes around $4 trillion in tax cuts over 10 years, affecting both individuals and businesses.
Winners Across Income Spectrum
- Most income groups gain increased after-tax incomes, but tighter future rules on credits may reduce benefits for the lowest 20%.
- The bill generally results in 2-4% boosts in after-tax incomes overall.
Economic Growth and Deficit Impact
- The bill increases long-run GDP by 0.6%, mostly from more work due to lower individual tax rates.
- However, deficit financing reduces net benefits to American incomes from economic growth.