Did anyone really think Republicans would be fiscally responsible?
Republicans Cave In on SALT
The SALT Deduction Explained
Now Guess What?
What’s the SALT Cost?
Tax Foundation: Take the recent proposed deal to raise the cap to $40,000 for all filers. With a $500,000 income phaseout threshold and a gradual increase in the cap over ten years, this proposal would cost about $320 billion on its own compared to an extension of the existing cap, and $150 billion compared to the $30,000 cap currently in the tax package, raising about $660 billion over 10 years on a conventional basis.
One Big Ugly Bill Details
Please consider The House passed Trump’s ‘big, beautiful bill.’ Here’s how it affects taxpayers and businesses.
- The plan will raise the nation’s debt ceiling by $4 trillion after Treasury Secretary Scott Bessent warned America’s borrowing authority is at the “warning track” and could be exhausted by August.
- The nonpartisan Congressional Budget Office (CBO) finding that the bill will lead to over $3 trillion in new red ink over the next decade.
- The CBO also released an analysis this week stating the bill’s effect would lead to the bottom 10% of Americans seeing their household resources reduced by 4% — largely through cuts to federal spending on Medicaid and food aid — while the top 10% would see an increase in their resources by 2%.
- The most hotly debated tax addition involved deductions for state and local taxes (SALT). In the end, Speaker Johnson acceded to a group of blue-state Republicans and included a higher SALT deduction of $40,000 annually in the package, up from the current annual deduction of $10,000.
- The no tax on tips and overtime provisions exclude “highly compensated employees” who fall above certain thresholds and were also recently revised to include gig economy workers.
- The child tax credit goes to $2,500 from its current $2,000 level. The standard deduction goes from $15,000 to $16,000 for single filers. Both expire in 2029 as well.
Expiring Benefits
Nothing will expire.
The original TCJA was set to expire this year. How’s that idea looking?
Penn Wharton Analysis
New Individual Tax Provisions
- Limit itemized deductions: The bill institutes a new limit on itemized deductions beginning in tax year 2026. This limitation applies to filers with taxable income that exceeds the 37 percent ordinary rate threshold for their filing status and reduces the allowable itemized deductions by 2/37 of the amount by which taxable income exceeds this threshold (or the total amount of itemized deductions, whichever is smaller).
- No tax on tips [*]: The bill provides a temporary deduction for qualified tip income, available to all filers regardless of itemizing status, beginning in tax year 2025. The bill sets general guidelines for forthcoming regulations governing what constitutes qualified tip income. These guidelines are intended to limit the occupations for which tipped income will qualify for the deduction. The deduction is limited to non “highly compensated employees,” generally individuals making less than $160,000 per year in 2025 dollars. This deduction ends after 2028 in the actual legislation but is modeled as permanent herein.
- No tax on overtime [*]: The bill provides a temporary deduction for the bonus amount of eligible overtime pay, available to all filers regardless of itemizing status, beginning in tax year 2025. The deduction only applies to overtime covered by the Fair Labor Standards Act, and is limited to non “highly compensated employees,” like the tip income deduction. This deduction ends after 2028 in the actual legislation but is modeled as permanent herein.
- Additional deduction for seniors [*]: The bill provides a new temporary bonus deduction for all individuals who have attained the age of 65. This deduction is $4,000 per individual and phases out at a rate of 4 percent of AGI over $150,000 for married taxpayers filing jointly, or $75,000 for all other filers. This deduction is available to all qualifying taxpayers regardless of filing status beginning in tax year 2025, and it expires after 2028 in the actual legislation but is modeled as permanent herein.
- No tax on auto loan interest [*]: The bill provides a temporary deduction for qualified passenger vehicle loan interest beginning in 2025. The bill outlines several restrictions on what constitutes qualified auto loan interest. It also limits the total deductible amount to $10,000 per year, or 20 percent of the taxpayer’s AGI more than $100,000 ($200,000 for married taxpayers filing jointly), whichever is lower. This deduction expires after 2028 in the actual legislation but is modeled as permanent herein.
- Charitable deduction for non-itemizers [*]: The bill provides a temporary deduction for charitable contributions, available to non-itemizers. This deduction is limited to $300 for married taxpayers filing jointly, and $150 for all other filers. It is available beginning in tax year 2025 and expires after 2028 in the actual legislation but is modeled as permanent herein.
- Permanently increase the SALT deduction cap to
$30,000$40,000: In the 2017 TCJA, the previously unlimited individual state and local tax (SALT) deduction was capped at $10,000, meaning itemizers could only claim a maximum of $10,000 of their state and local tax liability as a deduction. This bill provides a permanent new SALT deduction cap of$30,000$40,000.
Instead of simplifying the tax code, Trump sloshed around more favors trying to buy votes.
Please consider Trump’s “One Big Beautiful Bill” Would Increase the Deficit by $4.8 Trillion
Penn Wharton updated their budget analysis of the House bill as it now stands.
The actual savings from economic growth do not appear until 2033 and 2034 and are not enough to overcome higher costs in earlier years in the 10-year budget window.
The latest SALT change increases the deficit by another $320 billion. There were some offsetting changes to reduce spending on Medicaid and nutrition assistance.
Those changes include new and tighter work requirements, more frequent eligibility checks and shifts that would push more costs to states. The latest bill also accelerated phaseouts of clean-energy tax credits.
Total Fiscal Train Wreck
I have not seen new analysis that incorporate all of the new changes. But overall the bill is a total disaster.
SALT should have been dropped completely. Instead the deal went the other way.
Instead of simplifying the tax code Trump added new handouts of no tax on tips, no tax on overtime, and deductions for interest on cars loans.
The smart thing would be no deductions for anything, including mortgage loans (I would phase those out).
Trump’s Legacy
Trump is not going to run again. He is a lame duck. That means he had a golden opportunity to ignore the midterms do something right for the nation.
He could have simplified the tax code, reduced spending, and worked out a border deal with Democrats (Dreamer amnesty in return for agreement to deport criminals). An amnesty deal would have provided certainty to the labor markets.
Instead, Trump increased spending, increased deficits, decreased revenue, made the tax code more complex, made the tax code more unfair, raised taxes via tariffs (impacting small businesses and the lower income brackets the most), and finally he wants a ridiculous “Golden Dome” defense system that will cost trillions of dollars and is not even in this budget analysis.
For discussion of the latter, please see How Much Will Trump’s “Golden Dome” Missile Defense Shield Cost?
As expected in this corner, Republicans completely collapsed on the budget. Higher inflation is guaranteed.
Continuing a comment chain from the last post about intelligence and money.
People with the most money are not the smartest, but they are the biggest risk takers who succeeded, sometimes by blind luck. Many risk takers lose everything. Some succeed.
The entire idea that money means we should take someone’s advice implies we should let Soros and Musk set policy. How silly is that?
In terms of IQ, I bet Ben Bernanke would beat nearly all of us. How did his QE to infinity work out?
Bessent is not “dumb” in any real sense. But he did sell his soul for power. And the price is he repeatedly has to look like a fool defending Trump.
Bessent speaks as if he has some kind of mental challenge.
he might have swallowed too much.
Middle class culture, any culture, can only stand if it is rewarded. In prior times middle class culture was fundamentally supported by the upper classes, who invested in America, creating vast wealth.
They modeled sobriety, hard-work, risk and reward. The working classes modeled the behavior through church and labor guilds, standing together for each other and the nation.
The wealthy have abandoned America, and the working classes have abandoned religion, guilds, and each other. Into that void steps cultural anarchy.
Society requires hard-work, and discipline. It requires accountability, primarily of the wealthy. I tire of prose that lament the loss of culture without holding those accountable who have abandoned their responsibilities.
intelligence is common. as is wealth and fame. the real rare earth attribute is wisdom. much more important for a life worth living. bessent and bernanke and trump and musk are all lives not worth living. hat tip ancient greeks. and ancient chinese. nothing has changed in 5000 years.
Very much agree with your statements bmcc. The vast majority of people live an unconscious life. They are pulled hither and yon by their ego. Restless, insatiable, and constantly seeking,…..for what I’ll never know.
aye aye. it takes me about 15 minutes after meeting someone or talking to some old chum from my childhood to find out how lost most really are. the 4 part documentary “century of the self” and the book “ominous parallels” explains how it happened in the recent past. nothing really new but fascinating.
A lot is new; it’s human nature that doesn’t change.
“Century of the self” was excellent.
Edward Bernays was an evil SOB in my view.
The seems to me the goal is make as much wealth from the government. When it goes broke then step in and buy up assets on the cheap. Ie public land.
Reverse robinhood.
House Members with “buyer’s remorse” will have a second chance to torpedo the Bill when it comes up for the final vote. It was clearly a high pressure sales situation in the first go around that pressured them into accepting it. Hopefully, like a wise person who mistakenly signs a timeshare contract, they will decide on he next day, to cancel.
nice thought. not a shot in hell. the cult leader chairman mao zeDON rules with iron fist.
John McCain voted “no” on repealing the ACA at the last second. Maybe at least one or two of these Congresspersons still has a soul, and will surprise everyone at the last second, by torpedoing this horrific Bill. They need to break it up into separate pieces of legislation, and modify/revote each one until those can pass.
“The nonpartisan Congressional Budget Office (CBO) finds that the bill will lead to over $3 trillion in new red ink over the next decade.”
I find the fiscal debate in this country woefully uninformed. A more informed statement would run as follows:
“The nonpartisan Congressional Budget Office (CBO) finds that the bill will lead to over $3 trillion in new red ink over the next decade. This new red ink comes on top of $24 trillion old red ink, thus adding $27 trillion new debt to the present federal debt of $27 trillion held by the public.”
Why are we only talking about “new red ink,” when there is an ocean of “old red ink” going to explode the debt?
As long as our missiles (military) are #1 we can continue to crush the worlds poor w the Dollar- As soon as new tech shows as it will…no more printing fake fiat for American Exceptionalism- L the F outloud- We are not a serious people..imho
Trump’s entire agenda is the Democrat agenda from 25 years ago.
Trump was a Democrat most of his life.
If a government ever decreases spending, it’s only on permanent accounts (replacing them with more temporary ad-hoc expenditures). It’s like a Home Budget “$10 for rent, $10,000 for Miscellaneous“.
Last time I checked, he does no longer advocate for pro choice/abortion (as compared to the 1996 primary)
BINGO. trump governs like an old Dem from nyc.
The only saving grace is the morons that voted for him and think of themselves as republicans or conservative make the surround sound idiocracy worth the price of admission to this show. Like the old blue man group show in greenwich village 40 years ago. In front row you had to wear raincoats. No joke for the hicks out there.
Did the Social Security not taxed make it in. the bill? Interested since I just filed…LOL
I did not see that mentioned.
Apparently, that is a promise that was reneged on. Tips and OT were more important, apparently.
Congress can’t pass a law exempting social security benefits from tax via the budget reconciliation process, which is what was used to pass the bill.
If anything would start tax yr 2025
It is now crystal clear that neither side has any interest in addressing deficit spending. Another bait and switch by our politicians on their campaign promises. No point in voting again, it’s all BS.
2010 I realized that and registered Independent- enjoy 🙂
There arent just two sides. Libertarians are on the ballot and they say they will be against more debt. Might as well give them a chance to prove their word. Not voting would give no resistance to the deficit spending uniparty.
Tax deductions for the rich have been going on since forever. It should be borne in mind that the rich fund many politicians’ electoral campaigns and want a “payback” for their “investment.” Until campaigns are funded by taxpayers, there will always be a quid pro quo going on.
If the tip exclusion is passed, I will not be giving tips to anyone.
Something tells me you’re one of those people who adds a $25 tip for a doordash delivery and then after it’s delivered you go back on the app and rescind the tip.
Have we met somewhere that you think you know me?
big if true. stop the presses.
The people that work for tips bear the brunt of the incompetent unioparty leadership and policy. Charity gives the best return on investment
Almost everyone complains that the cost of houses are too high. Bumping SALT to 40k will only help to support the continuing upward slope in housing prices.
Absolutely.
That’s a dubious theory. The housing price problem has more to do with idiotic rules on builders and zoning laws designed to keep property values high while hurting the ability for first time buyers to get into a home.
At least on the West coast. There is no national housing market as each region and city has different issues.
The circus continues…..rinse and repeat. Turns out Trump has been the best democrat in decades.
Got exit strategy?
Those were the days, my friend, we thought they’d never end–
https://people.com/celebrity/hillary-clinton-and-bill-clinton-at-donald-trumps-wedding-photo/
yes. and yes.
SALT stands for State and local taxes. No comments here nor does Mish recognize that it includes a deduction for property taxes. As a resident of Red Florida, I can assure you that a deduction for the high property taxes will be well appreciated.
Also, those so-called mismanaged Blue states have the best education systems and it is the poorly run Red States that always have their handout for federal subsidies funded by Blue States. Maybe the Red States will now get their act together and make education a priority. The stupidly of the electorate has never been More alarming.
Blue states used to have the better education systems. Now they have indoctrination centers that want to turn little boys into little girls without parental consent. Real estate deductions are separate from SALT deductions. Otherwise you were spot on.
want to see how the most populous and perhaps the most leftist state in the country is doing with education? Here’s a link to the results. It’s really bad.
https://caaspp-elpac.ets.org/caaspp/DashViewReportSB?ps=true&lstTestYear=2024&lstTestType=B&lstGroup=1&lstSubGroup=1&lstSchoolType=A&lstGrade=13&lstCounty=00&lstDistrict=00000&lstSchool=0000000
the amerikan system since post ww2 has been asshole factory from K through retirement. makes no difference if one if from some shithole hick town or estate in malibu.
Hi Jennifer, kindly search “caaspp scores” and look at the results. If you think blue state schools are ‘the best’, you are in for a rude awakening.
keeping the people stupid and ignorant is the whole idea. not good to be wealthy if you don’t have staffs of morons to wait on you. this is an ancient formula.
And don’t say the obvious, someone’s feelings could be damaged.
Our education system wouid be a lot better if both the incompetent red and blue uniparty were voted out of office and replaced by responsible balanced budget government.
Either there should be a SALT deduction or their shouldn’t be. Having one with a low cap (10K) made the least sense of all. I wonder if the 40K proposal is because there will be a need for some horse trading in the Senate before it passes and reducing it to 30K to appear ‘tough’ on deficits is baked into the cards so that it ultimately ends up at 30K where he originally wanted it.
Note: 30K is where the married filing jointly standard deduction is so having it there means most people won’t be able to use it at all unless they have a lot of other itemized deduction since it doesn’t exceed the standard deduction.
I’m also with Mish on phasing out mortgage interest deductions. Get rid of that and SALT (even tho personally I’m going to benefit hugely from the SALT increase and I’m not in a Blue state so the idea that it’s Blue states only is silly, it’s a give away to big city dwellers, not Blue states.
Americans: too dumb to know better
This has nothing to do with intelligence. Which makes this more depressing.
correct. amerikans are just nihilists. self absorbed. and also world wide war mongers.
I want to see how many heads explode on the holiday weekend if this comes up and I say that I support Massie.
Although I rarely agree wiht him on anything, I have a lot of respect for him today.
Can we stop with the “steals from Red states” stuff? Because many of the Red states pay less to the Feds than they get back while the blue states like NY, NJ, CT, CA pay in more than they get in return.
Repeal the federal income tax. Problem solved. Those states would all be on-board, right?
don’t burst their bubbles. keep the government hands off my medicare scooter…….
The Red / Blue crap should stop completely. No state is all red or blue and the money mostly comes from / goes to individuals and businesses. Also, the methodologies I have seen have done it in a way where disbursements would include Social Security payments (largest government payout). Aside from the fact that no one looks at how the SS recipients vote, think a bit about how that might greatly distort the picture even just using the Red / Blue state labels (hint: mobility).
Trump has only ever cared about himself. He’s a narcissist and a con man. Suprised people still don’t see it.
So then what’s in this budget for him?
Nobody is going to spell something that simple out for you.
It’s a hodgepodge of various policies with no common thread. So picking out individual items is hard (maybe he liked the 199A deduction, which would otherwise expire). I wonder how many crypto provisions are buried in there as well? But I’d guess that his favorite provision is the prohibition on courts issuing nationwide injunctions (probably unconstitutional?), as it seems the USSC is divided on whether to prohibit that under common law.
how much money has flowed into his own personal wealth since 2024 campaign until now
how much money has flowed into his own personal wealth since 2024 campaign until now
Answer
Sources
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9
Tasks
cbsnews
Trump family’s net worth has increased by $2.9 billion … – CBS News
https://assets3.cbsnewsstatic.com/hub/i/r/2025/05/02/0621314e-9b1e-4773-86f0-823d41f5dee3/thumbnail/1200x630g3/eeb6da219dd64050e33e76c973580b8a/gettyimages-2194369823.jpg?v=7c5acc180b39394767372ab4e02619ce
https://www.google.com/s2/favicons?sz=128&domain=nasdaq.com
nasdaq
How Crypto Helped Donald Trump Double His Net Worth in 2025 …
https://www.nasdaq.com/sites/acquia.prod/files/gobankingrates/donald-trump-crypto-coin_BLU_A103992704.jpg
https://www.google.com/s2/favicons?sz=128&domain=bloomberg.com
bloomberg
Trump Family’s Net Worth Soars on Deals in Return to Presidency
https://www.google.com/s2/favicons?sz=128&domain=en.wikipedia.org
https://www.google.com/s2/favicons?sz=128&domain=economictimes.com
https://www.google.com/s2/favicons?sz=128&domain=truthout.org
+6 sources
Since the start of the 2024 campaign, Donald Trump’s personal wealth has increased dramatically—by at least $2.8 to $3.1 billion, and possibly more depending on the estimate—largely due to gains from his media and crypto ventures.
In summary, Donald Trump’s personal wealth has more than doubled—rising from roughly $2.3 billion at the start of the 2024 campaign to between $5.1 and $5.5 billion by May 2025—an increase of at least $2.8 billion, driven primarily by media and crypto-related ventures2357.
and his life is still a huge failure. he and musk are just white trash. how many zeroes in his account is meaningless.
Wow! I appreciate the truth and your research you have done. We were all betrayed. He sold us out.
Good to see at least a few people realizing. Heres a tip to not getting sold out in the future: dont vote for either the republicans or the democrats.
“He’s a narcissist and a con man. Suprised people still don’t see it.”
You may be the type of person who would be surprised to learn that those adjectives apply to a large portion of political candidates.
The current president is far from unique in that regard, but he is the epitome of braggadocio so he does stand out more than most of them.
It isnt just Trump. The entire uniparty of republicans and democrats, besides a very small few like Massie or Paul operate the same way: a bunch of fake culture war BS while the tell of their true nature is they always nearly unanimously agree on one thing: more deficit spending and debt.