Donald Trump has pushed through a sweeping tax and spending bill that will reshape America’s economic and social landscape. Signed just ahead of his self-imposed July 4 deadline, the nearly 900-page legislation offers massive tax cuts, boosts defence and immigration spending, and slashes key welfare programmes. Passed by a slim 218-214 House margin and a tiebreaker in the Senate by Vice President JD Vance, the bill underscores deep partisan divides and entrenched ideological battles. At its core, the bill extends Trump-era tax cuts permanently and introduces deductions on tips, auto loans, and overtime pay. It raises the child tax credit slightly and offers targeted relief to older Americans. However, the distribution heavily favours the wealthy: the top income groups will gain about $12,000 annually, while the poorest could lose $1,600 through Medicaid and food aid cuts. Critics argue this exacerbates inequality at a time when economic insecurity remains high. To offset revenue losses, the bill imposes new work requirements on Medicaid and food stamp recipients, introduces a $35 co-pay for Medicaid users, and begins shifting food assistance costs to states. An estimated 12 million more Americans could be uninsured by 2034, and millions could lose food assistance. Republicans argue these moves will reduce fraud and right-size entitlement programs, but analysts warn they could deepen hardship for working-class families.
At the same time, the bill allocates $350 billion for Trump’s border and deportation agenda, including funds for a wall, 100,000 migrant detention beds, and 10,000 new ICE officers. It also ramps up military spending, with billions for missile systems, shipbuilding, and a new defence shield. A further $1 billion will support border security through the Pentagon.
The legislation also reverses much of President Biden’s climate policy, cutting key tax credits for clean energy and electric vehicles. The rollback could cripple America’s renewable energy industry and undermine global climate cooperation. For countries like India seeking green investment and leadership from developed nations, this signals retreat at a critical juncture. Other controversial provisions include funding Trump’s “National Garden of American Heroes,” eliminating taxes on gun silencers, taxing university endowments, and creating “Trump Accounts” for children. Remittances from U.S. residents to families abroad will now carry a 1% tax — a move that may affect immigrant families from nations like India and Mexico. Despite Republican claims, the Congressional Budget Office estimates the bill will add $3.3 trillion to the deficit over 10 years. The GOP has countered with accounting that treats current tax breaks as baseline — a strategy economists call misleading. Nonpartisan budget groups have joined Democrats in calling this fiscal misrepresentation. Some bipartisan compromises made it into the final version: a $50 billion rural hospital fund and the removal of a ban on state-level AI regulation, following backlash from governors and lawmakers alike.
This bill encapsulates Trump’s political ethos: reduce taxes for the wealthy, cut welfare for the poor, militarise borders, and promote symbolic nationalism. Its long-term impact on America’s economy and global credibility remains to be seen. For now, it stands as a sharp reminder that economic policy, when driven by ideology rather than equity, risks leaving millions behind — and the world watching with unease.