What is Trump's recently approved mega law in Congress about?

The United States Congress definitively approved this Wednesday the long-awaited and ambitious "One Big Beautiful Bill Act", nicknamed the Big Beautiful Bill, legislation that represents one of the deepest restructurings of the country's fiscal, social, and budgetary system in recent decades.

Driven by the Republican majority and actively promoted by President Donald Trump,the law was approved by the House of Representatives with 218 votes in favor and 214 against, following a previous vote in the Senate on July 1 that was decided by the tie-breaking vote of Vice President J.D. Vance.

Some of the most notable points of this unbelievable law are associated with the elimination of taxes, reduction of the fiscal deficit, and increase in national security.

Elimination of Taxes 

The recently approved law will implement an unbelievable tax cut, which could be one of the largest in history, while also preventing the activation of various taxes created by Biden, which would have led to an increase in the tax rate to 68%. 

One of these reductions refers to the elimination of federal taxes on tips by allowing a deduction of up to USD 25,000 per year for workers who receive tips, such as waiters or delivery drivers.

This measure will especially benefit those who report high amounts of tips and was widely applauded by workers in the restaurant industry. 

In the same vein, the law eliminates the federal tax on overtime, allowing a deduction of up to USD 12,500 per year from overtime income. It applies to those earning less than USD 150,000 (individuals) or USD 300,000 (couples), but is gradually reduced above those thresholds. 

Meanwhile, it eliminates the federal tax on retirement income, including Social Security payments, private pensions, and withdrawals from accounts such as 401(k) and IRA, with an annual cap. The measure especially benefits middle-class retirees, with the goal of increasing net income for retirees.

The "Big Beautiful Bill" declares the restoration of energy independence as a national strategic objective. To achieve this, the law eliminates several federal taxes on hydrocarbons and allows for simplified exploration and exploitation permits, especially on federal lands.

It also authorizes public-private partnerships and accelerates energy infrastructure projects. The ambitious measure seeks to significantly increase domestic oil and gas production.

Stimulation of the U.S. Economy

The law approved by Congress promotes a tax exemption regime for automobiles manufactured in the United States.

This includes a tax deduction of up to USD 10,000 per year for interest on loans for new cars assembled in the United States, with a benefit that is gradually reduced for incomes above USD 100,000 (USD 200,000 couples) and is completely eliminated above certain thresholds. 

At the same time, it introduces significant deregulation for the installation of new oil and gas plants, accelerating federal permits and limiting state environmental intervention.

The law reduces environmental review periods to 6 months and eliminates requirements from the Clean Air Act and NEPA for certain strategic projects. It also grants tax exemptions to domestic operators who begin production before 2028.

With the goal of stimulating the U.S. economy, the law creates the so-called "Trump Accounts," which are tax-free savings accounts for minors under 18 years old, managed by their parents or guardians.

The government will deposit USD 1,000 at birth, with annual contributions allowed up to USD 5,000. The funds may be used from age 18 for education, housing, or entrepreneurship. Total withdrawals are allowed from age 30, always without penalty or taxes.

A Huge Cut in the Fiscal Deficit

In total, this law reduces public spending by more than USD 3 billion over a decade, by eliminating unnecessary federal agencies and programs or those used for political purposes.

Among the closed agencies are diversity offices, certain regulatory entities, and duplicated subsidy programs. The stated goal is to simplify the State and return power to the taxpayer.

In order to eliminate thousands of fraudulent beneficiaries this law tightens eligibility requirements for programs such as SNAP and Medicaid, including more frequent verifications and mandatory work conditions.

States will be able to audit and suspend benefits more easily, which would allow for the removal of millions of beneficiaries considered irregular or fraudulent. According to the government, the measure seeks to reduce fraud and promote self-sufficiency.

Border Security and Modernization of the Armed Forces 

In the face of the migration crisis that the United States has suffered for years due to disastrous Democratic policies, the ambitious legislation seeks to restore order in aspects of border security. 

To begin with, the law authorizes the deportation of up to 1 million illegal immigrants per year, increasing resources for the Border Patrol and ICE. It facilitates expedited processes and expands the categories of expulsion, with the goal of strengthening national security and reducing unauthorized immigration.

In this regard, to avoid astronomical expenses, the costs of immigration processes must be borne by the illegal immigrants themselves, eliminating the financial burden for taxpayers.

The law not only targets immigrants, but also provides for a massive expansion of the border security budget, increasing funds for various institutions up to 200 times. 

Finally, the law allocates a budget to complete the construction of the border wall with Mexico, finishing the pending sections from Trump's first administration, which the Biden administration completely abandoned. 

The modernization of the armed forces has also been an important aspect in the refinement of the law. It includes a massive increase in the Defense budget, allocating funds to modernize the armed forces and develop an advanced missile defense system, called "Golden Dome", inspired by Israel's Iron Dome.