3 ways that Trump’s megabill impacts the business world

Lawmakers moved Donald Trump’s “One Big Beautiful Bill” to the president for his signature and fulfilled a self-imposed deadline to pass it by July 4 after a series of intense and emotional debates consumed the past week on Capitol Hill.

In the end, the megabill moved through the Senate on a 50-50 tally that required Vice President JD Vance to break the tie before the 870-page bill passed the House a few days later in a vote of 218-214.

The process proved exceptionally contentious largely over healthcare provisions that are set to extract hundreds of billions in government savings but could cause millions to lose coverage.

Medicaid and the inclusion of a $5 trillion debt ceiling increase were just two of the most controversial pieces of a complex bill that is set to reshape whole swathes of the US economy, especially around taxes, energy, and healthcare.

House Speaker Mike Johnson reacts after the passing of President Donald Trump’s tax bill on the floor of the House of Representatives at the US Capitol on July 3. (ALEX WROBLEWSKI/AFP via Getty Images) · ALEX WROBLEWSKI via Getty Images

It’s a bill also set to be felt keenly in American pocketbooks with provisions like no taxes on tips, cuts to student loans and the Pell Grant program, changes to 529 plans for education expenses, an increase in state tax deductions, and a range of other provisions that both business and consumer groups will be digesting for months.

Clean energy companies are already paying perhaps the keenest attention, with government support for EVs and solar projects set to be eliminated in the years ahead due to changes in the bill.

Tesla (TSLA) CEO Elon Musk emerged during final negotiations as the top business-world critic attacking the bill’s price and how it treats clean energy. He said in recent days that the $3.3 trillion increase in debt expected from the bill makes a “mockery” of his work at the Department of Government Efficiency (DOGE).

Economists have likewise noted the final price tag, which could top $4 trillion. Also critiqued was an accounting gimmick Republicans employed to hide much of that red ink that Maya MacGuineas of the Committee for a Responsible Federal Budget called “a massive cover-up” in a withering statement that added that the bill was “the single most expensive, dishonest, and reckless budget reconciliation bill ever.”

Silicon Valley also has questions after a last-minute change stripped a closely-watched artificial intelligence provision.

But a range of GOP priorities that were included — from increased funding for border enforcement to money for America’s 250th anniversary celebration next year — pushed the bill over the line with many in corporate America also in favor and focused on the tax piece.

Business Roundtable Chair Chuck Robbins, the CEO of Cisco (CSCO), offered following the final vote that the bill would allow “American businesses to better plan, invest and build for the future.”

Trump for his part worked relentless to flip votes and get the bill passed calling it at one point the “greatest bill ever passed.”

Here is a closer look at three ways the current version the bill would impact the business world.

A centerpiece of the bill — and far and away the source of the most expensive provisions — surrounded taxes.

The bill’s main impetus has long been to permanently extend tax cuts for individuals contained in the 2017 Tax Cuts and Jobs Act, which Trump signed into law on a temporary basis during his first term.

The bill would represent a continuation of the status quo for taxpayers. As one example, the bill is set to mean America’s highest earners will carry on with a top rate of 37%.

The bill also provides new tax credits for individuals by fulfilling signature Trump campaign promises — albeit slightly less fulsomely than in the House version — via the elimination of taxes on tips, overtime, and car loan interest. It also offers an expanded standard deduction for seniors after Trump promised to eliminate taxes on Social Security benefits.

Employees will be able to deduct up to $25,000 annually for tips and overtime.

Senate Majority Leader John Thune, center, and his colleagues spoke to reporters after the Senate passed President Donald Trump’s so-called “One, Big, Beautiful Bill,” Act on July 1. (Andrew Harnik/Getty Images) · Andrew Harnik via Getty Images

Business owners, meanwhile, are keenly focused on a series of tax deductions that will reinstate credits for corporations for things like property depreciation, capital investments, new factory construction, interest expenses, and research and development costs.

Many of these provisions were present in the House version, but only temporarily. Permanency was a key Senate priority and is now included in the bill, even as it increased the price tag by hundreds of billions of dollars.

Senate Finance Committee chair Mike Crapo shepherded the tax changes and celebrated passage with a statement that said corporate provisions give “businesses the certainty they need to make the long-term investments that power economic growth.”

The bill also makes permanent the pass-through deduction at a rate of 20%. That deduction — formally known as the 199A deduction — is focused on often smaller businesses organized as S corporations or partnerships.

The Senate version also includes an array of other tax changes, including a $40,000 annual deduction for state and local taxes (SALT) for the coming years, an expanded child tax credit, enhanced credits for “opportunity zones,” and so-called MAGA accounts.

The effect on the energy sector could also be profound, especially after a last-minute series of changes turned the bill even further against the clean energy industry while offering new support for fossil fuels.

The bill has long been expected to phase out Biden-era clean energy tax credits, but the final bill will shut them down faster than many had expected.

The proposal to eliminate EV credits would even take effect on Sept. 30 of this year.

A late addition to the bill also raised worries that a new tax on wind and solar projects completed after 2027 was in the offing. But a flurry of objections led to a moderation, with the final draft quietly removing that excise tax.

“The bill’s targeted tweaks to solar and wind tax credits, especially the phaseout language, are a relative market positive given the onerous nature of the previously proposed excise tax,” is how Ed Mills of Raymond James summed up the net effects there.

President Trump speaks to the media before a trip to Florida on July 1. (AP Photo/Mark Schiefelbein) · ASSOCIATED PRESS

At the same time, new last-minute inducements were unveiled for fossil fuels, including one classifying coal as a critical mineral for a government manufacturing credit.

“We’re doing coal,” Trump said in a recent interview on Fox News’ “Sunday Morning Futures,” where he also called solar energy projects “ugly as hell.”

It was a mix that led Musk and others to predict that the larger effect of the bill would be to cut off clean energy, hurt the overall energy grid, and perhaps lead to higher utility bills.

At one point, Musk called the bill “utterly insane” and vowed that members of Congress who voted yes “will lose their primary next year if it is the last thing I do on this Earth.”

The bill is also set to implement major changes to the healthcare system.

Healthcare negotiations continued until nearly the literal last minute, and the overall package is set to trim the government’s Medicaid spending by around $900 billion in the years ahead.

Corners of the sector, like rural hospitals, are set to be most directly impacted.

Republican Sen. Collins of Maine flipped against the bill late in the process and explained her no vote afterwards as driven “primarily from the harmful impact [the bill] will have on Medicaid, affecting low-income families and rural health care providers like our hospitals and nursing homes.”

And the bottom line for patients — according to an accounting from the Congressional Budget Office that came in over the weekend — is that 11.8 million additional Americans would become uninsured by 2034 because of the healthcare provisions.

Some that lose coverage would be illegal immigrants, as Republicans often point out, but millions of US citizens are expected to lose coverage if the bill is enacted because of additional requirements to qualify for coverage.

This story has been updated with additional developments.

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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