President Donald Trump’s One, Big, Beautiful Bill Comes With Over $5 Trillion in Tax Cuts — and Possible Unintended Consequences
From Yahoo Finance: 2025-05-20 12:55:00
House Republicans propose a $5 trillion tax cut bill, raising concerns about debt and fiscal deficits. The bond market’s reaction could impact stocks and the global financial system. The One, Big, Beautiful Bill aims to pass key Trump initiatives in one sweeping legislation.
The bill includes over $5 trillion in tax cuts, making Trump’s 2017 tax cuts permanent. New cuts include a temporary increase in child tax credit and tips tax deduction. It also touches on areas like electric vehicle tax credits and increased border security funding, including a border wall.
House Republicans aim to fund initiatives with $880 billion in Medicaid savings, raising concerns over cuts. Critics warn the bill could add $5 trillion to primary deficits by 2034, increasing debt to $36 trillion. Rising Treasury yields may lead to stock market and global financial system impacts.
The Tax Foundation predicts the bill could boost GDP by 0.6% but lower tax revenue by $4 trillion by 2034. To offset, House Budget Resolution seeks $1.7 trillion in spending cuts, facing opposition. Rising Treasury yields could pose challenges as U.S. debt matures and requires refinancing.
Some experts believe the U.S. financial situation is unsustainable, with rising debt and potential credit downgrades. Investors are wary as Treasury yields rise unexpectedly. House Republicans’ tax proposal could have unintended consequences on the economy and financial markets, sparking concerns.