The 'One Big Beautiful Bill' is a proposed piece of legislation in the United States that includes tax reductions for citizens while simultaneously introducing new taxes and regulations concerning remittances, Medicaid, and federal assistance programs.
One of the key components of this bill is the remittance tax, which proposes a 3.5% excise tax on funds sent from the US to other countries. Given that 28% of these remittances are directed towards India—primarily from H-1B and Green Card holders—this tax could significantly diminish the flow of money into India.
Fortunately, US citizens and nationals have the option to evade this remittance tax. They can do so by utilizing a certified remittance provider that verifies their identity through the systems of the US Treasury.
Changes to Medicaid stipulate that users must now demonstrate they have worked a minimum of 80 hours per month. This new requirement may limit access to Medicaid for numerous non-working individuals who rely on it for healthcare.
Experts have raised alarms regarding the potential consequences of these Medicaid alterations, predicting that around 15 million Americans could lose access to healthcare services by the year 2034 due to these changes and other related factors.
The bill also proposes modifications to the 'SALT' tax deductions. Previously, individuals could deduct state and local taxes from their federal tax returns, capped at $10,000. The new proposal seeks to increase this limit to $40,000 over a decade, which would incur an estimated cost of about $320 billion.
Moreover, the federal government's plans include a reduction of $230 billion in funding for the food assistance program known as SNAP, while also requiring states to shoulder a larger share of costs. This could lead to decreased benefits for low-income individuals.
While it is anticipated that most individuals may receive some form of tax relief, data indicates that over 60% of the advantages will accrue to the wealthiest households earning in excess of $460,000.
Lastly, there are concerns that the proposed tax cuts could contribute to an increase in US debt. These cuts might lead to a reduction in government revenue while expenditures remain elevated, potentially exacerbating the national debt and heightening economic risks.
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