🚀 Deep Dive into Senate spending bill

Market Overview
Read time 1.4 minutes

Year To Date Performances:

Senate Republicans have passed their version of Trump’s sweeping tax-and-spending plan. The plan echos the House’s earlier bill with permanent 2017 tax cuts and new breaks for tipped workers, overtime earners, and car buyers — while slashing programs like Medicaid and SNAP, cutting clean energy tax credits, and reshaping student loan policies; though final details may shift, a House vote is expected this week as Trump pushes for passage by July 4. Here are the key points that you should be aware of:

• SALT Deduction Expansion: Starting in 2025, individuals could deduct up to $40,000 in state and local taxes, an increase that benefits higher-income earners who itemize. This threshold gradually rises each year before returning to the current $10,000 cap in 2030.

• Child Tax Credit Increase: Parents would see a permanent increase in the child tax credit to $2,200, with inflation adjustments starting in 2026. However, millions of low-income families may still be ineligible for the full credit.

• Senior Tax Bonus: Seniors aged 65+ could get a larger tax break—up to $6,000 each—though the benefit shrinks as income rises. This helps middle-income retirees more than the wealthiest.

• Medicaid Cuts: Health coverage for millions is at risk, with over $1 trillion in potential cuts and stricter work requirements. Shortened eligibility checks could lead to millions losing access to care over time.

• Food Stamp Reductions: Millions of vulnerable people, including children and the elderly, could face smaller SNAP benefits or even lose access entirely. States would have to make up lost funding, and stricter work rules would hit older adults and some parents.

• Child Savings Accounts: Children born from 2024 to 2028 would get a $1,000 federally funded starter account, with parents allowed to invest more over time. While intended to build long-term wealth, some experts prefer existing college savings plans with better perks.

• Student Loan Restrictions: Borrowing limits would tighten, especially for grad students and parents, and some loan types would disappear. Fewer repayment and deferment options would leave borrowers with less flexibility during financial hardship.

• Car Loan Interest Deduction: Families could temporarily deduct interest on new car loans—up to $10,000 per year—though the actual savings would be modest and phase out at higher incomes.

• Tip Income Tax Break: Tipped workers could deduct up to $25,000 of reported tip income from taxes, unless their earnings exceed $150,000 ($300,000 for joint filers). This measure is meant to boost take-home pay for service workers.

• Overtime Pay Deduction: From 2025 to 2028, workers could deduct up to $12,500 (or $25,000 for couples) of overtime pay. Higher earners would see this benefit gradually phase out.

• Clean Energy Credit Elimination: Incentives for electric vehicles and energy-efficient home upgrades would end after 2025. Households that planned to go green would lose thousands in potential tax credits.

• Small Business Deduction: Contractors and self-employed workers would retain their 20% income deduction indefinitely. Unlike the House version, the Senate plan doesn’t raise the deduction rate, but it still makes the benefit permanent beyond 2025.

  Headlines

  1. The Dow rose, while the S&P 500 remained flat yesterday, as investors began the quarter by shifting out of tech stocks.

  2. Figma has filed for an IPO and intends to use the funds raised for acquisitions.

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