The Big Beautiful Bill!

On July 31, 2025, Donald Trump signed an Executive order, something he is exceedingly fond of, for a 25% tariff on Indian Exports over and above the already declared reciprocal tariff of 26%, which he announced on April 2nd, 2025. Like many other countries, India, like the EU, Vietnam, and South Korea, tried to draw a trade deal with the USA to decrease the tariff rates from the initial announcement date. However, as India refused to revoke the excise duty it levied on the agricultural products from the USA, all negotiations fell through. This additional 25% tariff on India is because India has been importing oil from Russia, with a discount of $3-4 per barrel from the International crude oil prices. According to a report published in Mint, India has bought around $121.59 million worth of crude oil from Russia since the start of the Russian-Ukrainian war. India is not the only country facing an extremely high export tariff from the USA. China, the EU, Vietnam, Taiwan, South Korea, Singapore and many more such countries are facing this heat. The standard pretext behind these sweeping tariffs is that the tariffs boost American manufacturing and protect jobs. On the surface, it might look so, but economists are not so sure about the authenticity of that claim.

The Republican party that President Trump represents have for half a century believed that taxing the wealthy is not only immoral, hugely destructive to the economy and counterproductive to growth. Now, cutting the taxes on high incomes will produce miraculous economic growth. Nobel Laureate Economist Paul Krugman, in his book “Arguing with Zombies’ has shown how, for over half a century, the argument that taxing the rich would harm the economy has failed to die a natural death in the face of counter evidence of empirical studies. Trump was re-elected to office on November 5, 2025, with a campaign contribution of $288 million from the world’s richest man, Mr. Elon Musk. Once reinstated at the Oval Office, Mr. Trump introduced a new department called the Department of Government Efficiency (DOGE), where he made Mr. Musk the head. Musk took over the office, promising to decrease the USA federal spending by $2 trillion. By the time this office, rather than the camaraderie between Mr. Musk and President Trump, fell through, Mr. Musk could only reduce federal spending by $180 million by their own claims, but the federal budget committee has yet to verify them.

Then came the Big Beautiful Bill, which the Trump government is trying to give a tax reduction to taxpayers earning $1 million or more. They are expected to see a boost in after-tax income of about 3% under President Donald Trump’s “big beautiful bill.” The existing $10,000 cap on State and Local Tax deductions will rise to $40,000 for those making less than $500,000, with the income threshold increasing 1% yearly. It is a deduction given to taxpayers who can itemise their deductions to reduce their federal taxable income.

This one ‘big beautiful bill’ will be projected to add $3.3 trillion to the USA national debt over 10 years and an estimated $2.8 trillion to the budget deficit by 2034. The United States expects to raise at least $50 billion in monthly tariff revenue, a significant increase from previous months, with new tariffs on imports from numerous countries beginning to take effect. This projection comes after a substantial rise in tariff revenues in June 2025, which reached $28 billion, and a significant increase in the average effective tariff rate to 18.6% by August 2025, the highest since 1933.

Any rational reader will now be able to add two and two here. Mr. Trump was elected as the Presidential candidate for the USA 2024 election by the Republican Party to deliver their most cherished dream of taxing the middle class and giving tax cuts to the rich. The tax cut announced through ‘One big beautiful bill’ must be financed by the excise duties and tariffs levied on the middle class and poorer sections of society. How can he get away with this, you may ask? If his voters could believe that Mexico would pay for the wall, what stops them from accepting that foreign countries pay for the tariffs?

Views expressed are personal