Trump's Tax Stimulus JUST PASSED | What's inside the Big Beautiful Bill (BBB)

is adopted.

The big beautiful bill, what's inside of

it, and what amendments have changed in

the last few days. So, let's cover

everything, including some of the more

unique components you may not have heard

of before. Let's keep it as straight and

simple as possible, so we can stick to

the facts as much as possible. This is a

deficit spending bill, which basically

means yes, it is likely to add to the

debt. The CBO says up to $3.2 trillion.

KO, which leans a little bit more left,

says it's going to cost over $6

trillion. Tax Foundation, which leans a

little bit more right, tells us that

it's going to grow GDP by over 1.2%

on top of whatever our GDP was going to

be starting next year. And so that's

where everybody's going to have their

own opinion on if that's good or if it's

bad. Basically, no matter how you slice

it, we're taking on debt to borrow from

the future to give to the now and boost

the economy. One of the components of

this bill that was recently added

through amendment is a little bit of a

unique one and it has to do with

gambling. Under the Tax Cuts and Jobs

Act of 2017, if you were a professional

or casual gambler, you could deduct up

to 100% of your losses against your

winnings.

But you could only include your travel

expenses and other business expenses as

part of your losses. So in other words,

if you made $100,000 and you lost

$100,000 in losses and travel, you could

net those two against each other and pay

no taxes.

Now, the amendment maintains that.

However, it says you are limited to a

90% deduction on losses, which includes

business related expenses for gambling

style wagers, which means if your travel

expenses, hotels, or whatever worked up

to $100,000 of losses and actual

gambling losses, and your earnings were

$100,000, you'd actually be paying

taxes. So, you'd be coming out of pocket

$3 to $5,000 in that case just to stay

in business, even though you didn't make

any money. It sounds like a syntax and

it was just slid in. It appears to apply

to professional gamblers in LLC's or

not. Interesting little addin.

Charitable given giving. There is an

increase in the charitable giving uh

limitation or sort of deduction I should

say. If you take the standard deduction,

which most uh individuals take the

standard deduction, if you take the

itemized deduction, you'll have a floor

of 1 half% of AGI for uh for deductions

on donations, which kind of takes away

some of the benefits of donating if

you're itemizing or if you're a

corporate donator, that is a 1% floor

now. But for most normal folks taking

the standard deduction, instead of

having a $600 limit on how much you

could donate and actually write off

against your taxes, if you're single,

you can now donate up to $1,000 worth of

stuff and write that off on your taxes

while taking the standard deduction. And

if you're a couple, $2,000. So what does

that mean? Well, I don't know. Let's say

you have some old AirPod Pros and you

actually have the AirPod Pros and you go

donate them and you say, "Hey, this has

a value of $300 or whatever." you're a

couple and you donate, I don't know, six

of them. Well, you could write off

$1,800 on your taxes. Now, you don't

have to deal with the time of trying to

resell your product on eBay or whatever.

You just donate it, take the tax credit.

Kind of cool. Uh, so this is a nice

benefit for individual households taking

that standard deduction. As far as the

car interest deduction, there are a lot

of people wondering, "Hey, Kevin, does

it make more sense to buy a car now or

wait until next year when I can get the

car interest deduction?" Remember that

this big, beautiful bill includes the

opportunity to deduct up to $10,000 in

annual vehicle interest. Now, this would

be on the personal side since, remember,

you can already deduct 100% of your

business interest expenses. So for a

personal car on a new auto loan on a new

auto, so in other words, it has to be a

new loan and on a new car, that car has

to also then be assembled in the United

States, you could potentially deduct up

to $10,000 in annual vehicle interest.

Quick example of that. If you go finance

a Tesla at let's say $40,000

and you pay roughly 5.5% interest on

that because maybe there's no interest

benefit such as like a 0% APR or

whatever which would lower the benefit

obviously of the car interest deduction.

Well, in this case, you would end up

saving probably somewhere around $600 to

$900 in actual money. That's money you

would save at the end of the year by

writing off interest on about a $40,000

car loan at 5.5%. Saving somewhere again

between $500 to $900 depending on your

tax bracket. Well, if you compare that

to the $7,500

electric vehicle tax credit that you get

if you buy an electric vehicle before

September 30th, you can clearly see that

the electric vehicle tax break of $7,500

should you want an EV is worth about 10

times as much as this car interest

deduction. And that car interest

deduction only applies to the years 26,

7, and 8. Which means that the car

interest deduction doesn't last for the

life of the loan that you have the car.

If you're going to get a five or sixyear

loan or even a seven-year loan, like an

84-month loan, you're not actually going

to be in a place of reaping all of the

benefits of this vehicle interest

deduction, which makes that $7,500 tax

credit, which is a full $7,500 off your

taxes, really valuable. Most people

would have to deduct somewhere between

$15,000 to $20,000 in deductions from

their taxes to actually get $7,500 worth

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because remember, credits offset the

taxes you owe one for one, should you,

of course, owe taxes. Now, of course,

not everybody wants an electric vehicle,

and keep in mind that the car interest

deduction does phase out once your

income goes over $100,000 for a single

or $200,000 joint. Basically, it's not

that if you make $101,000, you go to

zero that you can claim on this. It just

gets smaller over time the more you make

over 110,000 and fully fades out pretty

soon into the lower 100s. Consumer

Financial Bureau Protection Bureau

funding is being cut in half. That could

end up reducing some of the protections

for lending for consumers. However, if

you reduce protections in lending for

consumers, you might actually also see

new lending products pop up. So you

might actually have more opportunities

for more potentially riskier but

different kinds of loans in the future.

Medicaid has been a big uh popular

argument regarding the big beautiful

bill. And basically the way Donald Trump

brands this as reducing waste, fraud,

and abuse is by saying, "Hey, you know,

we don't want illegal immigrants being

eligible for Medicaid anymore, such as

how California enables illegal

immigrants to get Medicaid. Uh and we

want people to work. So, if you do not

have children who are under the age of

14 and you are not disabled, starting in

2026,

you will have to work 80 hours per month

or approximately 20 hours per week up

until you are 65 years old in order to

receive Medicaid benefits. You would

also have to pay approximately a $35

co-pay for all Medicaid services.

Regarding SNAP benefits, SNAP benefits

start in 2028 or or changes to SNAP

benefits start in 2028. And basically,

this is gets a little complicated

between states and the fed, the federal

government. Essentially, if a state has

an error rate on their SNAP or food

stamp benefits program of less than uh

6%, they're fine. Not much changes here

with the exception of work requirements

which there will be work requirements as

well starting uh in a few years.

However, if a state like Alaska which

has an error rate on food stamps of

somewhere around 25% has an error rate

of six or more% then states are going to

have to start contributing to the food

stamp program from their own pockets

against what typically the federal reser

or the federal government pays for. Not

to be confused with the Federal Reserve

here. This bill does not affect the

Federal Reserve at all. It really has

nothing to do with the Federal Reserve.

It's entirely separate. This is a fiscal

policy bill. Whereas the Federal Reserve

deals with monetary policy. Put simply,

Congress is blowing debt money. Federal

Reserve prints money out of thin air and

they control interest rates. Okay.

Separate things. All right. And yes,

they don't technically print anymore.

They just change digits on a

spreadsheet. All right. Anyway,

immigration and security. This is a big

one. We are uh including in this package

over $350 billion for immigration and

security. Just some of those

subcomponents are going to be $25

billion for the Golden Dome, $46 billion

to finalize the construction of the

border wall, $45 billion for $100,000

bed migrant detention facilities.

Presumably companies like Rathon, who

make the Patriot Air defense solutions,

would be big beneficiaries of this.

There's also, of course, talk about the

$1,000 deposit for the um uh Trump

accounts as seed money. This is

basically where uh if a child is born

during the Trump administration, they

would end up qualifying for a tax

account that could essentially be

deposited into uh their, you know, into

the stock market or some form of index.

That hasn't exactly been decided yet

exactly what they will do with this, but

it's essentially a tool where accounts

would be would receive a $1,000 deposit

from the government made for children

born between 2025

all the way through the end of 2028.

There are some notes that it might end

up going for the extra two weeks to

finalize out on Trump's term, but

basically 25 to 28. uh and they would

permit up to $5,000 of annual after tax

contributions and the savings would grow

tax per deferred. So basically uh if you

pay your taxes on money and you throw it

into a child's account, you could put up

to $5,000 in there. So you pay your

taxes, you put $5,000 of leftover money

into there and then it can grow tax

deferred. So as it it's growing, it

doesn't pay taxes right away presumably

in the future as money is taken out.

There could be some tax implications.

all of that to be determined. Uh this

would also require a social security

number for both parents and the child

and the child will be automatically

enrolled and receive a onetime $1,000

deposit from the federal government into

their account. Uh if you do make

withdrawals for qualified expenses such

as college tuition, business loans

expenses, business expenses, first-time

home purchase, the withdrawal would face

a long-term capital gains tax rate. Uh

otherwise, if you take money out early,

you would get a uh 10% penalty on top of

the individual tax rate. Then it says

withdrawals are allowed from half of the

account once the account owner turns 18

and from full from the entire account

once the account owner turns 25. When

the account owner turns 31, the

remaining balance is treated as

withdrawn and taxed accordingly. So it's

entirely unclear there. I mean from from

that read it sounds like it kind of gets

liquidated when you're 31 and just

transferred to you and taxed entirely.

But I'm not entirely clear of that. So

TBD, some of that might still get worked

out. Remember when these big beautiful

bills or whatever you want to call them

pass, we get what's in the law and then

we end up getting Treasury Department

interpretation later. And that's why

it's really hard to figure out what the

cost of these bills is actually going to

be because they could end up costing a

whole lot more money in the future

because of how things are interpreted.

Uh you can see here's the present at the

very moment. a vote of the bill 216 uh

to two Republican naysay and Democrats

at 212 nay. So plenty of votes there uh

to complete this big beautiful bill.

Additionally, there are billions of

dollars uh being allocated to the Aremis

moon mission and for the exploration of

Mars. No state regulation for the AI

provisions. So in other words, let me

rephrase that. A lot of states were

thinking about having individual rules

against AI. And there was talk that

there would be a provision in this bill

that states are not allowed to regulate

AI, but that was removed by 99 out of

100 senators. So they're like, "Yeah,

no, no, no. Let states do it themselves

if they want. Let them regulate it."

Okay, very well. So otherwise, uh,

practically some practical deductions to

think of is the standard deduction is

going up $750 for everyone, $1,500 for

couples with inflation adjustments now,

which is a change that there'll be

inflation adjustments. It's expected to

cost about $1.5 trillion. Well, $1.4

trillion right there. That will move

your standard deduction to $31,500 for a

joint filer, $23,625

for head of household, $15,750

for a single, and the personal exemption

is permanently gone. It's been gone

since the tax cut and jobs acts. You

probably have already forgotten about

that anyway. Uh we're getting AMT,

permanent increases to the AMT, child

tax credit, going from 2K to 2.2K. So, a

little bit of a boost there. Not as big

as some people had hoped, but a little

bit of a boost. And it keeps that Ivanka

Trump 2K because it used to be 1K and it

got moved up to 2K. That was one of the

big Ivanka Trump uh you know missions of

of sort of the first administration

which she was involved with. Right now

she's obviously not involved with

politics and she seems to get really

emotional in interviews when people ask

her about politics. So it seems like it

sort of burned her uh at least mentally

potentially the way it burns Elon as

well. Some people live for it like Trump

just seems to get stronger through it,

you know. It's kind of crazy. Anyway, uh

permanently keeping the 2017 tax cuts,

the 10 to 37% tax brackets, which would

have gone up. Donald Trump says that

everybody would experience a 68% tax

increase. This is a little loony uh and

and kind of more like propagandish. It's

fine. That's what you would expect from

any politician. If it was a Democratic

politician, they would have their own

propaganda as well. Realistically, tax

rates like the actual tax you would have

been paying without this bill would have

gone up somewhere 5 to 10%. It just

depends on what you're looking at. Like

obviously if your business is spending a

lot of money on R&D or capital expenses

like planes or machinery or you know

H100 Nvidia chips some of these extra

capital and accelerated cost

appreciation benefits which benefit real

estate as well would be very uh uh you

know could could affect you

substantially more tax-wise. Uh as far

as no tax on tips, it's worth knowing

that we have more clarity on this now.

So, regarding the no tax on tips, you

are able to deduct as an individual up

to $12,500 of the premium portion of the

overtime. So, basically like that extra

50% that you get paid. Uh so, if you get

paid, I'm just going to make this

simple, $100 an hour and then you get

paid $150 an hour for 10 hours of

overtime, that extra $50 or $500 times

10, right? That $500 uh would be the

premium portion and that would be

deductible. So, you'd be able to write

that off on your taxes even as an

individual taxpayer. Now, it's worth

noting that up to this there's a limit

here. You can only do up to $12,500

individually or $25,000 as a couple.

That's the limit. This means the

employer, because you're deducting it,

this means your boss still has to pay

FICA, which is Social Security,

Medicare, FUDA, Suda, those are the

state and federal unemployment uh

insuranceances. the employee uh tax

training programs or training programs,

whatever, uh and and other t basically

payroll taxes. So, the employer still

has to pay the payroll taxes, but you

get to deduct $12,500

maximum uh or $25,000 as joint. Now,

keep in mind there's a phase out for

this. It phases out at 150k single and

300k joint for overtime. The bill has

officially also just passed, just a

heads up. Uh salt tax deductions are

going to $40,000. State and local tax

deduction cut, $40,000 for head of

household, sorry, per household rather.

So salt tax deduction going up to 40,000

per household, but it will revert to

10,000 in 2030. So basically 25 6 7 8 9

those six years will have a 40k salt

limit. Uh the larger standard deduction

for seniors, this is to try to offset

some of those social security taxes.

$6,000 greater standard deduction for

seniors. Uh, however, that starts

phasing out if your M, your modified

adjusted gross income exceeds $75,000.

Uh, and then, uh, for tips, there's been

a lot of confusion. I've been confused

by this as well. It's worth noting that

the IRS considers cash tips as ordinary

tips that you would ordinarily get paid

in your course of business. So, you

can't just turn around and reclassify

everything as tips. Has to be ordinary.

And if indeed it is ordinary and you've

been paid ordinarily as tips before,

then uh you have no tax on tips which

include credit card tips because cash

tips are actually called credit card and

cash tips per the IRS. It's the most

bizarre definition ever. Why they call

it cash tips, I don't I don't know, but

it's worth mentioning that as far as uh

uh rich tax breaks, uh the estate tax

exemption is being lifted uh about $1 to

$2 million uh $15 million for

individual, $30 million for joint.

That's the lifetime gift tax basically

going up. For businesses, we're going to

get the 179 uh expensing, so 100%

write-offs for capital equipment. This

will apply on qualified property

acquired on or after January 19th. So

basically like anything that you've

bought that's capital equipment. It

could be uh frankly an airplane uh for

use in business. It could be H100

hardware chips, whatever. Any kind of

machinery for your business, you could

fully expense it, which is kind of

crazy. I did this under Trump in 2022

and I bought a plane, but I financed it.

So I put like I don't know 25 or 30%

down on it, but I was able to write off

100% of it. So it's actually really

incredible for like motivating spending.

It's it's a huge component of getting

businesses to spend money. Very

impressive uh component of Trump's tax

policy here for businesses.

Additionally, for uh R&D expensing, you

can get full expensing of domestic

research and development expenses

beginning in 2025.

Uh and you can go retroactive to 2021

and accelerate some of your your

write-offs. Uh basically, you know, you

could go back to 22, three, four, those

old tax returns, retroactively expense

them. Uh probably means, you know, it

just lets you accelerate some of the

things you've been depreciating.

Basically, the 20% pass through business

deduction is being made permanent.

That's the 199A. Uh and individuals

taking more business deductions than

their income carries uh than their

income carryovers are made permanent.

So, there's a 262k loss for single, a 22

or 524k loss for joint. Basically, net

operating losses roll forward to future

years if you take more than that for

individuals versus business deductions.

This would be different though if you

had like, you know, a W2 and a separate

escorp. It's more like escorp to

individual. Anyway, that gets a little

more complicated. Uh we do also have

dates for the clean energy tax credits.

The uh EV tax credit, $7,500, goes away

September 30th. And the home residential

energy tax credits go away December

31st. which means if you wanted to buy

an electric vehicle this year, you

should do it before September 30th. And

if you wanted to buy a home solar panel

system, you should do it before the end

of the year. However, there's a carveout

for leasing in this. So, if you lease

solar panels or do a power purchase

agreement, those have a few more years

in it. So, it's really just if you're

going to buy the panels, which most

people don't just go out and buy the

whole panels, that's somewhat worth

paying attention to. So, overall, that's

the main sort of core breakdown of

everything that's in the Big Beautiful

bill. Uh, obviously, it's 900 pages

long, so I'm sure I didn't hit

everything, but it is official. Uh, the

bill has indeed passed and it will be on

Donald Trump's desk before July 4th,

which is exactly what he has been

demanding. And once again, he got what

he wanted. So, there it is. Uh, it is

official. Is adopted.

[Applause]

Why not advertise these things that you

told us here? I feel like nobody else

knows about this. We'll we'll try a

little advertising and see how it goes.

Congratulations, man. You have done so

much. People love you. People look up to

you. Kevin Pra there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.