Latest news with #StateandLocalTax
The Hill
3 days ago
- Business
- The Hill
Voters split on Trump's ‘big, beautiful bill:' Poll
Voters are evenly divided on President Trump's 'big, beautiful bill,' according to a new poll. A Harvard CAPS-Harris Poll released on Monday found 44 percent of respondents who said they supported Republicans' major policy bill while another 44 percent said they didn't support the legislation. A separate 12 percent said they were not sure. Among the provisions that fared the best among respondents included expanding health savings accounts and increase support for farmers, ranchers and disaster recovery (76 percent); reducing federal spending by $1.3 trillion (69 percent); and creating a permanent child tax credit that is now at $2,200 per family (67 percent). Some of the provisions that fared the worst among respondents include removing tax and registration requirements for firearm silencers (31 percent); imposing a 5 percent tax on remittances sent abroad (43 percent); and raising the State and Local Tax (SALT) deduction cap to $40,000 for those earning under $500,000, which decreases to $10,000 after five years (47 percent), among others. Polling also found respondents divided on whether Trump's megabill helps or hurts the economy. Forty-eight percent said it will improve the economy while 52 percent said it will make the economy worse. Both Republicans and Democrats are leaning into the GOP policy bill as a part of their midterm messaging, with the GOP pointing to its tax cuts as a major benefit while Democrats have criticized the Medicaid cuts included in the bill. The divide over Trump's key package of priorities raises questions over whether voters will see the legislation as an aide or liability for the party heading into the 2026 midterms. 'Like everything else in the country, attitudes towards the bill are split right down the middle. But there are a lot of popular tax cuts in the bill that the [R]epublicans could capitalize on,' said Mark Penn, chairman of the Harris Poll, in an email. The Harvard CAPS-Harris Poll survey was conducted from July 6 to July 8 and surveyed 2,044 registered voters. It is a collaboration of the Center for American Political Studies at Harvard University and the Harris Poll. The survey is an online sample drawn from the Harris Panel and weighted to reflect known demographics. The margin of error is 2.2 percentage points.
Miami Herald
07-07-2025
- Business
- Miami Herald
Secretary Bessent sends strong 4-word message on ‘Big Beautiful Bill' worries
The Big Beautiful Bill, officially signed into law on July 4, makes major changes to the tax code this year. After significant jaw-boning and contentious debate, President Donald Trump successfully won enough support in the House and Senate to usher the 900-plus page One Big Beautiful Bill Act across the finish line. The passage sets the stage for a massive increase in the State and Local Tax (SALT) deduction, offering needed tax relief to homeowners in high-tax zip codes. It also means a significant bump in the Social Security income tax deduction, which, while not eliminating Social Security income taxes, will mean far fewer people have to pay Federal taxes in retirement. Related: Social Security bonus, SALT Tax deduction changes arrive The Social Security bonus deduction and SALT tax changes will win cheers from taxpayers, but not everyone is happy about this bill. Tax cuts mean far less revenue for the government, which is problematic because of our already concerning and growing debt pile. The risk that the One Big Beautiful Bill Act balloons the deficit has captured the attention of Treasury Secretary Scott Bessent. Bessent, a long-time stock market veteran trained under legendary hedge fund manager Stanley Druckenmiller, has a long history of experience navigating good and bad economies. His take on concerns surrounding the Big Beautiful Bill will likely raise a few eyebrows. Bloomberg/Getty Images The One Big Beautiful Bill Act's main feature is that it continues the tax cuts provided under the Tax Cuts and Jobs Act (TJCA), which was passed in 2017 during President Trump's first term in office. Removing tax uncertainty by extending those cuts was important, but not the only promise made by President Trump on the campaign trail. Related: Legendary fund manager has blunt message on 'Big Beautiful Bill' The Act also includes a big tax break for those 65 years of age and up. It also provides more financial wiggle room to families living in high-tax neighborhoods by significantly increasing the State and Local Tax (SALT) Deduction to $40,000 from $10,000 under the TJCA. The Social Security bonus deduction is one of the most closely watched and popular changes. While President Trump couldn't remove Federal income taxes on Social Security entirely, the Act does increase the deduction for Americans over 65 to $6,000 from $2,000 previously. To qualify for the bonus deduction, you don't even need to be collecting Social Security. However, Robert Powell points out one downside: If you collect Social Security and are not 65 yet, you're out of luck. Overall, roughly 88% of Social Security beneficiaries will pay no tax on their benefits, up from 64% previously, according to Kelly Phillips Erb, widely known as the "Taxgirl." The Big Beautiful Bill Act also exempts up to $25,000 per year in tip income, makes the popular 20% qualified business income (QBI) deduction under Section 199A permanent, and doubles the estate and gift tax exemption. To help pay for those cuts, the Act eliminates tax credits for electric vehicles, energy-efficient heating and cooling, and other green energy breaks on solar and wind power. It also cuts Medicaid by expanding work requirements and shifts the cost of SNAP benefits to states with an error rate above 6% (42 of 50 states miss this threshold). The CBO estimates that changes to Medicaid will result in 11.8 million people losing health insurance through 2034. Still, even with those controversial cost cuts, the Big Beautiful Bill Act is arguably pricey, and expected to swell the already sky-high deficit. Related: Secretary Bessent sends message on Walmart price increases due to tariffs The Congressional Budget Office estimates the bill will boost deficits by $2.8 trillion through 2034. "The debt, which is now about 6x of the money taken in, 100 percent of GDP, and about $230,000 per American family, will rise over 10 years to about 7.5x the money taken in, 130 percent of GDP, and $425,000 per family," noted veteran fund manager Ray Dalio. "That will increase interest and principal payments on the debt from about $10 trillion ($1 trillion in interest, $9 trillion in principal) to about $18 trillion (of which $2 trillion is interest payments)." Scott Bessent is the 79th United States Secretary of the Treasury. Since being sworn in, he's emerged as a key voice of reason regarding economic matters, including tariffs and trade deals. Given his role and long history tracking economies and markets, it's unsurprising that he commented on the debt worries caused by the Big, Beautiful Bill Act. His TL;DR takeaway is that the bill promotes US growth, and revenue associated with that growth will far outpace any increased spending caused by the bill. "The historic tax relief President Trump just signed into law will stimulate unprecedented growth and make America affordable again," said Bessent in a statement on July 4. Bessent went into more detail in several interviews and posts promoting the bill's passage over the weekend. Broadly, he claims that tax relief will encourage hiring, investing, and wage growth, similar to the passage of the 2017 TJCA. "The CBO is wrong," wrote Bessent bluntly on X. "Even with full expensing for manufacturing equipment and historic tax relief, the CBO still projects only 1.8% growth. If you turn up the growth projections to 2.8%, which was achieved during President Trump's first term, then the debt disappears... We are growing GDP faster than debt and that trend will continue through the remainder of the President's term." Bessent is highly confident that growth will materialize, at least in the short term. "Are we growing the GDP faster than we're growing the debt?... I am sure [it] will happen over the remainder of the President's term," said Bessent on CNBC. Related: Goldman Sachs revamps Fed interest rate cut forecast for 2025 The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
05-07-2025
- Business
- Miami Herald
Legendary fund manager has blunt message on ‘Big Beautiful Bill'
It's official. The Big Beautiful Bill is law. President Donald Trump successfully arm-wrestled support in the House and Senate to get his signature tax cut and spending bill across the legislative finish line on July 4. It wasn't easy. The House only passed the bill initially after blue-state Congressmen successfully increased the State and Local Tax (SALT) Deduction substantially, providing much-hoped-for relief to homeowners in high-tax communities. The Senate was even more contentious. Some senators recoiled at the bill's size, forcing steep cuts to energy tax credits and Medicaid. Still, even with those offsets, the bill carries a staggering price tag. Ultimately, the bill squeaked through, with Vice President Vance's vote resulting in a 51-50 final vote tally. Related: Goldman Sachs revamps Fed interest rate cut forecast for 2025 That cost captured the attention of longtime Wall Street icon Ray Dalio. Dalio founded Bridgewater Associates, a hedge fund now managing more than $112 billion of assets. He's featured in the popular "Market Wizards" series of books, and his prescient economic and stock market predictions have made him a billionaire worth $16 billion, good enough to rank him 156th on Bloomberg's Billionaires Index. Over his 50-year investment career, Dalio has navigated his share of good and bad economic times, and many consider him among the most successful in predicting what could happen next to markets. Lately, he's focused on the U.S. debt level as a major crisis looms. Perhaps unsurprisingly, that's led to him offering a pretty blunt take on the Big Beautiful Bill Act. Image source:One of the biggest features of the law is that it extends tax cuts provided in the Tax Cuts and Jobs Act, which was passed in 2017 during President Trump's first term in office. That's not all it does, though. Related: Veteran analyst sets eye-popping S&P 500 target On the campaign trail, President Trump made a series of promises, including more tax breaks for Americans and rolling back much of former President Biden's green energy initiatives. The over 900-page One Big Beautiful Bill Act makes good on promises to reduce taxes on Social Security and tips. However, it falls short of entirely removing taxes on them. For example, rather than eliminating income taxes on Social Security, the act provides a Social Security bonus deduction by increasing the deduction to $6,000 from $2,000 previously. Tips are also excluded from Federal income taxes; however, there is a $25,000 deduction limit. The act also eliminates tax credits for electric vehicles, energy-efficient heating and cooling, and other green energy breaks on solar and wind power. To reduce the cost of income tax cuts, the One Big Beautiful Bill Act makes steep cuts to Medicaid, including expanding work requirements. It also shifts the cost of SNAP benefits to states with an error rate above 6%. Those moves have proven highly controversial. The CBO estimates that changes to Medicaid will result in 11.8 million people losing health insurance over the next decade. Dalio has focused much of his time researching the rise and fall of economies. This research has led him to a worrisome prediction for America. Specifically, Dalio believes that our substantial and growing debt pile has us on a collision course with an economic Armageddon. He predicts that as our spending increases, people and governments will balk at buying our debt, causing a spiral that could result in either Treasury debt defaults or restructuring. Unfortunately, Dalio sees little political will in Washington, D.C., to cut the spending cord, as evidenced by Congress passing the One Big Beautiful Bill. "After spending time in Washington, D.C., discussing the budget deficit with senior people on both sides of the aisle, it's clear to me that we are unlikely to change the debt trajectory we're on and avoid the painful consequences," wrote Dalio on X. The toll taken by passing the One Big Beautiful Bill is a stiff one. The CBO estimates that the bill adds a whopping $7 trillion a year in spending and only generates about $5 trillion in revenue. As a result, debt relative to GDP will surge, adding more pressure to the economy. "The debt, which is now about 6x of the money taken in, 100 percent of GDP, and about $230,000 per American family, will rise over 10 years to about 7.5x the money taken in, 130 percent of GDP, and $425,000 per family," noted Dalio. "That will increase interest and principal payments on the debt from about $10 trillion ($1 trillion in interest, $9 trillion in principal) to about $18 trillion (of which $2 trillion is interest payments)." That's a lot of money. And Dalio thinks it will require some pretty uncomfortable fixes down the road. "[It] will lead to either a big squeezing out (and cutting off) of spending and/or unimaginable tax increases, or a lot of printing and devaluing of money and pushing interest rates to unattractively low levels. This printing and devaluing is not good for those holding bonds as a storehold of wealth, and what's bad for bonds and U.S. credit markets is bad for everyone," said Dalio. "Unless this path is soon rectified to bring the budget deficit from roughly 7% of GDP to about 3% by making adjustments to spending, taxes, and interest rates, big, painful disruptions will likely occur." The challenge, however, will remain business as usual in D.C. Politicians eager to continue to win elections will continue to make big promises, and cash-strapped Americans can't be faulted for wanting relief. However, kicking the can down the road on our debt may create a bigger problem that will be harder to fix. "While virtually everyone agrees on the need to address our debt problem in a balanced way that includes tax increases and cuts to benefits, they also agree that they cannot speak up because politics have become absolutist," wrote Dalio. "We must find a solution around absolutist pledges like, 'I will not raise taxes,' or 'I will not reduce benefits,' when they are desperately needed." Related: Legendary fund manager issues stock market prediction as S&P 500 tests all-time highs The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Newsweek
05-07-2025
- Business
- Newsweek
Congress' Newly Passed Bill Means Homeowners Could Save Thousands In Taxes
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. While President Donald Trump's newly passed "big, beautiful bill" makes sweeping changes to programs such as Medicaid and SNAP that have drawn significant opposition, there's some good news for homeowners. A key provision included in the law will raise the cap on the State and Local Tax (SALT) deduction to $40,000. That's four times the previous $10,000 limit, meaning homeowners could save thousands of dollars in taxes each year, depending on where they live. Why It Matters Trump signed the massive spending plan into law on Friday, offering significant boosts to homeowners. For those living in places with high income taxes and property bills, the new SALT cap could result in thousands of dollars saved, potentially affecting the greater housing market affordability in those areas. A "for sale" sign is displayed outside a home on August 16, 2024, in Los Angeles. A "for sale" sign is displayed outside a home on August 16, 2024, in Los Angeles. PATRICK T. FALLON/AFP via Getty Images What To Know While the SALT deduction cap was previously set at $10,000, the new Trump and largely Republican-endorsed law has raised the amount to $40,000. A little over 65 percent of Americans own their homes, translating to roughly 230 million homeowners, according to Simply Insurance. But homeowners who live in states with high income taxes are much more likely to benefit from the changing SALT cap. In New Jersey, for example, nearly 40 percent of properties are taxed over $10,000, with New York falling close behind at 25.9 percent, according to "Increasing the SALT cap from $10,000 to $40,000 will have the greatest impact on homeowners in areas with highest state and local taxes, or those in the most expensive homes," senior economist Jake Krimmel told Newsweek. "An additional $30,000 in deductions could amount to about $10,500 in annual tax savings for such homeowners, assuming a 35 percent federal marginal tax rate." The newly approved bill also extends the deductibility of mortgage insurance premiums, which originally expired after tax year 2021. Middle-class homeowners can use this deduction to get some additional tax relief. What People Are Saying Krimmel also told Newsweek: "While the deduction provides tax relief for higher-income homeowners, it may also affect certain local housing markets. Raising the SALT cap creates a greater incentive to own in expensive, high tax neighborhoods, such as affluent suburbs with high property taxes and good schools. As demand for these neighborhoods rises, expect home prices to edge up there, too." Kevin Thompson, CEO of 9i Capital Group and host of the 9innings podcast, told Newsweek: "The SALT deduction is going to be a major win for the people in blue states like New York and California. This brings back a much needed tax deduction for those high tax areas." Alex Beene, financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "The SALT cap was one of the most contested components to tax legislation during the first Trump presidency. Its increase offers a huge boost to taxpayers in states like New York and California that have homeowners with higher property tax costs and is mostly good news for residents in certain states dealing with the same inflationary pressures others are." What Happens Next There could be a surge of homebuyers in previously expensive real estate markets with high taxes due to the SALT cap increase. Florida and Texas residents especially could see some housing cost relief as a result, experts say. "You can start seeing a positive increase in people moving to areas where taxes are a bit higher due to being able to offset some of the cost using a higher SALT deduction," Thompson said. "In previous years, there was a migration out of those states but now there could possibly be less of a migration and people willing to stay in those high tax areas."
Axios
27-06-2025
- Business
- Axios
House GOP fumes at changes to Trump bill: "Insulting and disgusting"
House Republicans are looking on with a combination of horror and frustration as President Trump's "big, beautiful bill" morphs into something closer to a hulking monstrosity in their eyes. Why it matters: It seems every House Republican you ask — from the most right-wing to the most most moderate — has something they don't like. For lawmakers from high-tax states, that's the watering down of a hard-fought increase to the State and Local Tax (SALT) deduction cap. For fiscal hawks, it's rulings made by the Senate parliamentarian that have axed a variety of spending cuts and regulatory changes they sought. Driving the news: The Senate parliamentarian has ruled out provisions to cut Medicaid and the Consumer Financial Protection Bureau, weaken environmental regulations and bolster President Trump's immigration crackdown. Some of these provisions are long sought-after hobby horses that were added to the bill to win over the votes of specific House Republicans. Others are key pay-fors meant to offset some of the cost of renewing the Trump tax cuts, which deficit hawks in the House say are necessary to honor a budget deal they cut with the Senate GOP. What they're saying: Senate Majority Leader John Thune (R-S.D.)" needs to honor the deal and find the savings and make math work," Rep. Chip Roy (R-Texas) told Axios. "We got that commitment from Thune, we got that commitment from the White House," said Rep. Eric Burlison (R-Mo.). "Hopefully ... they know that anything that doesn't really meet that, we mean it when we say it's not going to fly in the House." Rep. Lloyd Smucker (R-Pa.) told Axios he is "willing to accept a lot of changes to the bill," but if it doesn't comply with the budget framework "I won't be voting for it, and I think there's a lot of others." Zoom in: On the SALT cap, which Senate Republicans initially proposed reducing from $40,000 in the House-passed bill to just $10,000, blue state Republicans are even more furious. "They need to get real in what they present us, or this bill ain't ever going to happen," Rep. Nick LaLota (R-N.Y.) told Axios. LaLota called the latest SALT proposal, which he said was valued at $200 billion, less than the $340 billion in the House-passed bill, "insulting and disgusting." "Obviously, there's a strong disagreement on the number and we're continuing to dialog with [the administration]," Rep. Mike Lawler (R-N.Y.), a key member of the SALT caucus, told reporters. Reality check: We've heard this before, only for House Republicans to turn around and vote for the bill under pressure from Trump. "There are concerns with the changes that they have made [in the Senate] ... I don't think we're just going to roll-over," Rep. Troy Nehls (R-Texas), a staunch Trump ally, told Axios.
