SouthernWorldwide.com – A year after President Trump enacted the “One Big Beautiful Bill Act,” the effects of this significant tax and spending legislation are becoming clearer, revealing a range of beneficiaries and those who have been negatively impacted.
The comprehensive law reduced taxes for a vast number of households and businesses. Simultaneously, it aimed to fund these tax cuts by decreasing federal expenditures on programs like Medicaid and food stamps.
“President Trump’s Working Families Tax Cut is simultaneously delivering short-term economic relief while laying the groundwork for long-term economic growth,” stated White House spokesman Kush Patel in an email to CBS News. The law was signed by President Trump on July 4, 2025.
Patel further elaborated, “The benefits go beyond just a one-time tax refund check, with other provisions like full equipment expensing and a permanent 20% tax deduction for small businesses fueling long-term investment that will create jobs and raise wages.”
Republican lawmakers have praised the legislation, characterizing it as a measure that provides tax relief to low- and middle-income families while also curbing waste and inefficiency in federal programs. Conversely, Democrats argue that the tax cuts, many of which they contend primarily benefit high-income earners and corporations, are being financed by reductions in programs that support the most vulnerable populations.
“Both can be true,” commented Andrew Lautz, director of tax policy at the Bipartisan Policy Center, a Washington, D.C.-based think tank. He noted that while many tax cuts are “pretty squarely targeted at middle-class taxpayers,” there are also “many provisions in this bill that primarily benefit the wealthy.”
The actual impact of the OBBBA is observed to differ based on factors such as income level, age, employment status, and reliance on federal aid programs.
Given that several key provisions, including new Medicaid work requirements and changes affecting student loan borrowers, are scheduled to take effect in the latter half of 2026 or in 2027, this analysis focuses on the aspects of the law that have already influenced households, businesses, and federal programs.
Winners: High-income households
A significant tax benefit under the OBBBA was the continuation of provisions originally established by the 2017 Tax Cuts and Jobs Act, which was a signature piece of tax legislation during President Trump’s first term. Without the OBBBA, these 2017 tax cuts were set to expire at the end of 2025, which would have led to increased taxes for many households starting this year.
Higher-income households saw substantial benefits as the law permanently maintained the top individual tax rate at 37%, preventing it from reverting to 39.6%. This change predominantly affects the top 2% of U.S. taxpayers, defined as individuals earning over $640,000 and married couples with at least $768,000 in annual income, according to the nonpartisan Center for American Progress.
The OBBB also provided advantages to high-income households by increasing the state and local tax deduction, raising the cap from $10,000 to $40,000 per year.
“The top 1%, in fact, are in line to get $1 trillion in tax cuts from the law over a decade,” Jon Whiten, deputy director of the nonpartisan Institute on Taxation and Economic Policy (ITEP), informed CBS News.
Winners: Corporations
Corporations have also emerged as major beneficiaries of the bill. The OBBBA reinstated and made permanent 100% bonus depreciation for investments in short-lived assets. This provision allows companies to reduce their tax liabilities by immediately deducting the entire cost of many investments, rather than amortizing them over several years.
Furthermore, the law made domestic research and development expenses immediately deductible, offering another benefit to businesses by allowing them to lower their taxable income.
Whiten of ITEP noted that the OBBBA “included a potpourri of special subsidies and tax breaks that have slashed the tax bills of many hugely profitable corporations.” He provided an example: “For example, Amazon, Alphabet, Meta and Tesla together took home an astonishing $51 billion in tax breaks in 2025, much of it from the new law.”
Winners: Tipped and overtime workers
The provision referred to as “no tax on tips” was designed to help tipped workers, such as waiters and hairdressers, retain a larger portion of their earnings. Similarly, the “no tax on overtime” aims to achieve a comparable objective for overtime pay.
Approximately 7 million workers claimed the “no tax on tips” deduction, while 28 million individuals claimed the overtime deduction, as reported by the House Ways and Means Committee in May. The typical deduction in the most recent tax year was $7,000 for tips and $3,100 for overtime, according to the congressional panel.
“Tens of millions of working-class Americans have more money in their pockets thanks to President Trump’s signature provisions,” asserted White House spokesman Patel.
Winners: Senior citizens
Under the OBBBA, taxpayers aged 65 and older received a “$6,000 bonus deduction,” subject to income limitations. For instance, this deduction begins to phase out for single filers earning over $75,000 and is completely phased out for those with incomes exceeding $175,000.
Around 34 million seniors utilized this additional deduction this year, according to data from the House Ways and Means Committee.
Winners: Families saving money for their kids
The OBBBA introduced “Trump Accounts,” a new type of tax-advantaged investment account specifically for children. This initiative includes a $1,000 Treasury deposit for eligible newborns.
Starting July 4, parents, employers, and others are permitted to contribute to these accounts, which are available for children born between January 1, 2025, and December 31, 2028.
Michael and Susan Dell of Dell Technologies have also pledged to contribute $250 to each of up to 25 million children under the age of 10 residing in areas with a median income below $150,000.
U.S. Treasury Secretary Scott Bessent informed CBS News’ Kelly O’Grady in an exclusive interview on Thursday that over 6 million Americans have opened Trump Accounts to date. He expressed hope that these accounts would encourage savers to adopt a long-term investment strategy and to leverage the power of compounding, which leads to exponential wealth growth through earning interest on accumulated interest over time.
“We want them to really understand the power of long-term compounding,” Bessent stated regarding the program’s participants. “So what we want them to understand is, what does a piece of the action feel like?”
Losers: SNAP recipients
The OBBBA enacted “unprecedented” changes to SNAP, commonly known as food stamps, according to Poonam Gupta, a tax expert at the Urban Institute, a nonpartisan policy research group.
The law imposed new work requirements on able-bodied adults between the ages of 18 and 64. Previously, this rule applied only to adults under 55. Additionally, other groups that were previously exempt, such as former foster youth, veterans, and individuals experiencing homelessness, must now also meet the work requirement.
Individuals who fail to satisfy the work requirement are eligible for only three months of SNAP benefits. However, some experts suggest that these work requirements may ultimately prove beneficial to recipients and the broader economy.
“Decades of research show attaching work incentives to government benefits helps families more than the transfer alone,” commented Adam Michel, director of tax policy studies at the nonpartisan Cato Institute. “The positive effects of work requirements even carry into the next generation through improved outcomes for the kids.”
SNAP recipients are not the only parties affected by the OBBBA’s modifications. Retailers may also experience losses, according to Heather Hahn of the Urban Institute, who researches the impact of federal policies like SNAP on the well-being of children and families.
“With fewer SNAP benefits going out, retailers, especially smaller ones, which depend a lot on sales from SNAP benefits, will see less revenue,” she explained.
States, which manage the federally funded program for their residents, began implementing the work requirements last fall. Since the OBBBA’s enactment, SNAP participation has decreased by over 4 million individuals, or 10%, through March, according to the Center on Budget and Policy Priorities.
Furthermore, Medicaid enrollees will be subject to new work requirements and more frequent eligibility reviews starting in 2027 under the OBBBA. These changes are projected to result in a reduction of Medicaid enrollment by an estimated 5 million to 10 million people, according to the Urban Institute.
Losers: EV and clean energy businesses
The OBBBA terminated federal tax incentives for electric vehicles last year and also phased out certain clean energy credits, including those for rooftop solar and home efficiency improvements.
The law also accelerated the phaseout of some corporate tax credits designated for clean energy investments, such as those in solar and wind energy, as reported by the consulting firm RSM.
Electric vehicle sales have seen a significant decline since the OBBBA ended the tax credits for these vehicles. Sales were down 22% in 2026 compared to the previous year, according to data from Cox Automotive.
