United States President Donald Trump’s so-called “Big Beautiful Bill” was signed into law on Independence Day, July 4.
It is a sweeping tax and spending package that reshapes major aspects of US domestic policy.
The new law is 870 pages long, far-reaching and one of the biggest transfers of wealth from workers and the poor to the billionaire class in US history.
Trump’s rationale — supported by most Republicans — is that more wealth in the pockets of billionaires like himself, paying low taxes, will “trickle down” to the middle and working classes and make “all Americans rich”.
But Trump’s assertions have been debunked by liberal and conservative economists as false or highly exaggerated.
An Economist/YouGov poll conducted on July 4 found that 53% of people strongly or somewhat oppose the new law, while just 35% support it.
Tax cuts
The new law makes the 2017 Trump tax cuts permanent — they were initially given a 10-year lifespan. It also lowers taxes on the wealthy and adds an estimated $3.4 trillion (some estimates are higher) to the national debt over 10 years.
Republicans have traditionally favoured a balanced budget, but Trump does not care about that.
Businesses will get an immediate financial break because they will be able to write off 100% of the costs of equipment and research.
In a sop to workers, the law scraps federal income taxes on workers’ tips and overtime pay for those on less than US$150,000 a year. However, workers will still pay other taxes on their income, and the tax break decreases the more a single worker earns over this amount.
It raises state and local property tax deductions for federal income taxes, capped to $40,000 for households earning under $500,000, which is of no benefit to renters.
It creates tax-advantaged “Trump Accounts” for children born between 2025–28, purportedly to encourage savings and investment for education or home purchases.
Trump says he is fulfilling several of his 2024 campaign promises, but fails to mention the fine print, including that his tax cuts expire after 2028.
Before 1983, Social Security benefits were not taxed at all. Trump’s law does not eliminate all taxes on Social Security recipients, as Trump promised. Instead, it offers a temporary additional $6000 tax deduction for seniors aged 65 years and over who earn $75,000 a year, or $12,000 for couples earning $150,000.
Social safety net undermined
Medicaid health insurance funding, which goes directly to providers, rather than individuals or families, has been cut by 12%, with new work requirements and eligibility restrictions imposed.
Millions of people on low incomes will lose Medicaid insurance coverage once the new law is fully implemented in December next year. Rural clinics will be forced to shut down, as will many clinics in poor Black, Latino and Asian urban communities.
Along with Medicaid cuts, which disproportionately harm children and seniors, there will be cuts to the Supplemental Nutrition Assistance Program (SNAP) benefits (formerly known as food stamps) through new work and documentation requirements.
Cuts to SNAP benefits and the Affordable Care Act are projected to lower after-tax income for the poorest tenth of households by $1 trillion over the next decade, according to the Congressional Budget Office and the Center for Economic and Policy Research.
The policies will also mean that more than 12 million people currently covered by health insurance will lose it. They will be lucky to get help at Hospital Emergency Departments — which according to federal law must serve everyone.
Clean energy cut, while ICE, military get more
The law includes big reductions to clean energy incentives, including rolling back many Joe Biden-era climate policies.
Previous tax incentives for wind and solar energy are being cut dramatically, while Trump is expanding the use of fossil fuels.
The electric vehicle tax break of $7500 for new vehicles and $4000 for used vehicles was supposed to continue until 2032. Now, it will disappear on September 30.
Meanwhile, the law legislates $75 billion in new funding for Immigration and Customs Enforcement (ICE), expanding its detention capacity and deportation efforts and making its budget larger than other police agencies.
ICE functions like a secret police force in a totalitarian state. Agents wear masks and do not identify themselves when grabbing people off the street — in violation of state and local laws.
ICE will soon have twice the number of agents as the Federal Bureau of Investigation.
Another $46 billion has been allocated to expand the border wall and construct barriers, and $12 billion for Border Patrol expansion.
The Department of Defense will receive about $1 billion in new funding for border security.
The law adds $150 billion in new military spending, including missile systems and shipbuilding, raising the total war spending above $1 trillion.
Another $25 billion is being set aside for the US to develop its own version of Israel’s missile defence system, dubbed the “Golden Dome”.
A historic investment will be made into the US military in the Arctic, including for icebreakers and Coast Guard upgrades.
Tariffs
Trump’s tariffs will compound the negative effects of the new budget bill on the working poor, as they are effectively a tax on all goods and services. They will also wipe out any modest gains for better-paid workers who get some benefits from the tax cuts and other changes.
Before Trump took office, the aggregate tariffs were 2%. They have now risen to 16% and rising.
Trump is using the tariffs for political purposes. He recently imposed 50% tariffs on all goods from Brazil — where the US has a trade surplus — and is pressuring the government to drop insurrection charges against former far-right president Jair Bolsonaro.
Since the new tax law was signed, Trump has slapped new tariffs on Canada (35%), Mexico (30%) and the European Union (30%). All are due to begin on August 1.
Trump’s drive to remake the federal government and its institutions into an authoritarian regime accelerated even before passage of the new budget bill.
The Supreme Court has reinstated almost all of Trump’s executive orders rejected by lower courts. Critics inside the government, such as public servants, are driven out or threatened. In the FBI, lie detector tests are being used to weed out officers critical of director Kash Patel and Trump.
Trump has instructed the justice department to go after his perceived enemies, including a former FBI director and CIA director.
When Trump lost the 2020 presidential election, he urged his supporters to mobilise and takeover the Capitol on January 6. More than 1200 were arrested and prosecuted over the attempted insurrection. Once Trump returned to office, he pardoned them and promised to go after his enemies in the courts, law firms, universities, big media and public service.
Trump is also targeting Democratic Party-run states and continues his state police and National Guard occupation of Los Angeles.
Opposition grows
Nevertheless, there have been growing numbers of protests against ICE raids on schools, courts and workplaces, where racial profiling is used to go after Brown people, undocumented migrants and even US citizens.
The protests have not been organised by the Democrats, however, but by people at the grassroots, such as immigrant rights and civil rights groups, federal workers who are losing their jobs, veterans and seniors losing benefits.
More than 5 million people turned out in more than 2000 cities and towns in the “No Kings” protests on June 14, to oppose Trump’s agenda. This followed an estimated 5.1 million people who mobilised across the country in the “Hands Off” protests on April 5.
Nationwide protests are also expected around the November 2026 mid-term Congressional elections.
While the Democratic Party cries foul over Trumpism, it did little during Biden’s four years in office. For example, Biden did not seek to repeal Trump’s 2017 tax law. The Democrats’ friends on Wall Street — who fund their electoral campaigns — supported the previous tax law and its expansion.
People cannot rely on the bourgeois “establishment” opposition to fight Trump’s agenda. This same establishment attacks protesters who reject electoralism. It even targets those, such as Zohran Mamdani in New York City, who run for office as part of a strategy to build the movement against Trump.
We must counter Trumpism with organisation and mobilisation in the streets, in our workplaces and communities. This is a long fight, but when the system fears a more fundamental change, the ruling class will be forced to make concessions.
Mass action is the only strategy that can succeed.