New Policies of The United States: One Big Beautiful Bill Act
- The "One Big Beautiful Bill Act" (OBBBA), championed by President Trump, has been signed into law on 4 July, bringing significant changes to the U.S. tax system and encompassing a wide range of tax and spending policies.
- Key items from the One Big Beautiful Bill Act include:
- Tax Cuts: The bill introduced some tax relief measures. These include tax breaks for tips and overtime pay, an additional $6,000 standard deduction for some seniors, and a temporary increase in the State and Local Tax (SALT) deduction cap from $10,000 to $40,000. Furthermore, the bill plans to increase the child tax credit to $2,200.
- Benefit and Spending Cuts: The bill significantly cuts social welfare programs. Medicaid eligibility is tightened, increasing work requirements for childless, able-bodied adults, potentially causing nearly 12 million Americans to lose health insurance. The Supplemental Nutrition Assistance Program (SNAP, or food stamps) also faces stricter eligibility requirements, with states required to bear some of the costs. Additionally, the bill cuts several clean energy tax credits introduced during the Biden administration.
- Spending and Industry Support: The bill substantially increases the budget for defense and border security. Funding for border security and Immigration and Customs Enforcement (ICE) also sees a significant boost to strengthen immigration enforcement and border control.
Possible impacts of the OBBBA on the Professional Services Industry:
- China's Supply Chain & New Energy Industry
- The global new energy industry supply chain is facing adjustments, which may affect professional services for Chinese companies going overseas and advisory for foreign investments into China.
- Cross-Border Tax Consulting for Corporations
- Changes to U.S. tax law require all multinational corporations to overhaul their global tax structures. This fuels demand for advisory services on tax impact analysis, corporate restructuring, and compliance with the complex new permanent rules.
- Consulting for High-Net-Worth Individuals
- A permanent $15 million U.S. estate tax exemption and new deduction rules necessitate a review of financial plans for wealthy clients with U.S. assets. This creates opportunities for the wealth management sector in estate, gift, and income tax planning.
