The U.S. House of Representatives narrowly passed the “One Big, Beautiful Bill Act” on May 22, 2025, by a 215-214 vote, marking a significant step in extending the 2017 Tax Cuts and Jobs Act and introducing new tax policies championed by President-elect Donald Trump. The bill, now under Senate debate, has ignited discussions over its economic implications, particularly its projected $3.8 trillion addition to the national deficit over a decade, as estimated by the Congressional Budget Office (CBO). A controversial remittance tax targeting non-citizens, including Non-Resident Indians (NRIs), has further fueled international and domestic criticism.
The legislation makes permanent the 2017 Tax Cuts and Jobs Act, which lowered income tax rates across all brackets but disproportionately benefited higher earners. It doubles the standard deduction to $16,000 for individuals and $32,000 for joint filers, and raises the state and local tax (SALT) deduction cap from $10,000 to $40,000 for those earning under $500,000. These changes aim to provide tax relief but come at a steep cost, prompting Moody’s to downgrade the U.S. credit rating last week due to concerns over rising debt.
A key provision imposes a remittance tax, reduced from 5% to 3.5% after amendments, on money sent abroad by non-citizens, including H-1B, L-1, and F-1 visa holders, as well as green card holders. Set to take effect January 1, 2026, this tax could significantly impact the Indian diaspora, with the U.S. sending $33 billion in remittances to India in 2023-24, per Reserve Bank of India data. Experts warn this could reduce remittances by 10-15%, costing India $1.65 billion annually, potentially weakening the rupee. Mexican President Claudia Sheinbaum called the tax “unacceptable,” citing potential unconstitutionality, while Mexican Senator Antonino Morales labeled it “discriminatory.”
The bill also eliminates taxes on tips for workers earning under $160,000, expiring in 2028, and removes taxes on overtime pay temporarily, costing $124 billion per the CBO. These measures, fulfilling Trump’s campaign promises, have garnered support from groups like the Culinary Union but face criticism for benefiting higher earners disproportionately. Additionally, a tax deduction for interest on loans for American-made cars, capped at $10,000, aims to boost domestic manufacturing but has raised concerns about implementation.
The Senate debate is expected to be contentious, with Republicans holding a 53-47 majority but facing internal divisions. Senators like Kevin Cramer have criticized the bill’s fiscal conservatism, and the CBO warns it could trigger $500 billion in Medicare cuts under a 2011 law. The remittance tax and social safety net reductions, including Medicaid and SNAP, have drawn ire from Democrats, who argue the bill favors the wealthy while cutting resources for low-income households.
As the Senate deliberates, the bill’s fate remains uncertain. Its passage is a victory for Trump and House Speaker Mike Johnson, but changes are likely before it reaches the president’s desk. The remittance tax, in particular, could reshape financial planning for millions of immigrants, prompting calls for legal challenges and diplomatic responses from affected countries like India and Mexico.
