Tue Jul 08 10:40:00 UTC 2025: **Trump’s “One Big, Beautiful Bill” Becomes Law, Offering Tax Breaks and Expanded Benefits to Workers**
**Washington D.C.** – President Donald Trump’s sweeping tax and spending bill, dubbed the “One Big, Beautiful Bill,” is now law, promising significant changes for American workers. While Trump touts the law’s potential to boost the economy and increase workers’ take-home pay, particularly for hourly employees, experts caution that the nearly 900-page legislation’s impact is complex and requires careful examination.
One of the most talked-about provisions is a tax deduction for tips. Starting in the 2025 tax year, workers can deduct up to $25,000 in qualified tips from their taxable income, subject to an income cap of $150,000 ($300,000 for joint returns). However, some economists are skeptical of the impact of this tax break. Yale’s Martha Gimbel warns that workers may not realize a substantial benefit if they already pay little or no federal income tax. Additionally, experts like Nisha Verma from Dorsey & Whitney point out that the measure could unintentionally impact tip pooling practices and potentially discourage employers from raising wages or supporting a higher minimum wage for tipped workers.
Another key provision allows workers to deduct up to $12,500 ($25,000 for joint returns) in qualified overtime compensation, also starting in the 2025 tax year. However, this deduction is set to expire at the end of 2028.
The new law also expands access to federal Pell Grants for students in eligible workforce programs focused on high-skill, high-demand jobs. This provision, expected to take effect on July 1, 2026, aims to address the need for more skilled workers by extending Pell Grants to short-term and postsecondary training programs.
Businesses will also see an increase in the tax credit for employer-provided child care, starting in 2026. The bill increases the tax credit for employers who provide child care to their employees, potentially boosting labor force participation, especially among women.
Furthermore, the “One Big, Beautiful Bill” makes permanent the provision allowing employers to offer up to $5,250 in tax-free student loan repayment assistance. Starting in 2026, this amount will be adjusted for inflation.
While the law aims to provide benefits across various sectors, concerns persist about whether all workers will equally benefit from its provisions. Nisha Verma emphasizes that the practical application of some deductions still needs further clarification and preparation.
The effects of the “One Big, Beautiful Bill” are expected to unfold over the coming years, prompting ongoing analysis and discussion regarding its potential benefits and challenges for American workers.
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