President Trump's new bill benefits high earners and defense contractors, but proposes cuts and taxes

From Yahoo Finance: 2025-05-21 14:31:00

President Donald Trump’s new legislative package is causing division, with Republicans touting it as a big bill and Democrats labeling it a betrayal. The bill includes tax breaks that benefit high earners and wealthy individuals, as well as increased spending on defense and border security.

The winners of the bill include high-income earners who would benefit from permanent tax breaks and the elimination of federal taxes on tips and overtime pay. Military, defense, and border security spending would also increase, potentially benefiting major defense contractors like RTX Corp. and Lockheed Martin Corp.

On the other hand, the bill proposes new taxes on private university endowments and significant cuts to programs like Medicaid. This could impact major Medicaid managed care organizations and low-income Americans who rely on food assistance through the Supplemental Nutrition Assistance Program (SNAP).

If passed, the bill could also lead to the end of clean energy initiatives, key tax credits, and impose new fees on electric vehicles. This could slow the growth of the clean energy sector and make renewables less competitive compared to traditional energy sources.

The bill’s approval would significantly impact the national debt, adding approximately $3.3 trillion over the next decade. The next steps involve review by the House Rules Committee, potential amendments, and a full vote on the House floor before moving to the Senate, where further changes and challenges are expected.

Read more: Here’s Who Wins And Loses