2025 Tax Reform: What Does the New Tax Plan Propose?

The new tax bill promoted by former President Donald Trump, currently under debate in the U.S. Senate, proposes a series of significant changes to the country’s tax policy. Among the most notable elements are a substantial tax cut for high-income earners, a potential increase in the federal deficit, and cuts to key social programs such as Medicaid and SNAP.

Tax Cuts for the Wealthiest

One of the most talked-about aspects of the proposal is the reduction of over $600 billion in taxes for the top 1% of earners. This group, which holds a large share of the nation’s wealth, would benefit from tax exemptions that, on average, would amount to more than $400,000 annually per person in the top 0.1%.

At the macroeconomic level, this measure represents the largest transfer of resources to the wealthiest strata in modern U.S. history.

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Deficit Increase and Spending Criticism

According to official estimates, the tax reform could increase the national deficit by approximately $4 trillion over the next 10 years. This impact adds to the precedent set by the Trump administration, which had already increased the national debt by $8 trillion during its first term, even without accounting for pandemic-related spending.

Although some sectors have expressed concern over this rising deficit, the debate continues in Congress, where differing economic and fiscal viewpoints are clashing over the way forward.

Cuts to Social Programs

The new budget plan also includes significant cuts to social spending. Among the proposals is a $1 trillion reduction in funding for Medicaid and SNAP, programs that provide medical care and food assistance to millions. Projections suggest these measures could affect more than 8 million people who may lose medical coverage and nearly 11 million who could lose food assistance, including 4 million children.

At the same time, the proposal includes the creation of a national school voucher program, with a $20 billion allocation in tax credits, which has garnered interest from proponents of educational privatization.

Structural Changes and Additional Measures

Beyond economic measures, the proposal includes provisions to expand the use of gun silencers and to limit the ability of courts to enforce judicial orders, sparking debate about its scope beyond fiscal matters.

Impact on Taxpayers and Possible Repercussions

According to an analysis by the Center on Budget and Policy Priorities, individuals in the bottom 25% of annual income (less than $30,000 a year) could see their disposable income reduced by up to $1,000, while higher-income groups would enjoy far greater benefits.

This scenario raises concerns among analysts about the long-term sustainability of a fiscal policy that could weaken the purchasing power of a significant portion of the population and increase economic inequality.

Conclusion

Donald Trump’s new tax proposal, currently under Senate discussion, is shaping up to be a reform with major implications for the tax and social structure of the United States. While some sectors welcome the incentives for investment and capital savings, others warn of the economic and social consequences of cuts and increased deficit. The final approval of the plan will set the country’s economic course for the coming years and will have direct effects on millions of citizens.

From: https://www.theguardian.com/commentisfree/2025/jun/02/big-beautiful-tax-bill-deficit-trump

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