Category Taxes & Tools

Senate’s Historic Vote Locks In Tax Cuts, Securing Savings for Millions

In a historic 51-50 vote, with Vice President J.D. Vance delivering the deciding vote, the U.S. Senate approved a significant tax reform bill, marking the largest change to the tax system since 2017. The bill permanently extends many tax cuts enacted in 2017, which were originally set to expire after 2025. For everyday workers and families, this means that lower income tax rates will stay in place. Specifically, the 12% tax bracket won't go back up to 15%, the 22% bracket won't jump back to 25%, and the highest income tax rate will remain at 37% instead of increasing to 39.6%. As a result, millions of Americans will likely keep more of their incomes, potentially influencing household budgets, personal savings, and overall economic security for years to come.

Senate Moves Forward on Landmark Tax Shake-Up Amid Economic Uncertainty

In July 2025, the U.S. Senate moved ahead with major tax policy changes as tax cuts from the Trump era were nearing expiration. The Senate's proposed bill includes reducing taxes for middle-class families by eliminating federal taxes on tips and overtime income, placing new limits on itemized deductions, and authorizing significant new borrowing that could total up to $5.3 trillion through 2034. These changes aim to ease financial pressure on American households dealing with recent economic challenges, such as inflation and uncertainty about the economy. The Senate's actions follow the House's approval of a similarly ambitious plan focusing heavily on major tax cuts, setting the stage for major negotiations on the budget and tax policy between lawmakers in the coming months.

Maryland’s Wealth Shift: Higher Taxes Target High Earners and Digital Economy

On July 1, 2025, Maryland introduced significant tax changes aimed at raising money from wealthier households and the digital economy. Under the new rules, the state added two extra income tax brackets, increased taxes on capital gains by 2% for homes making over $350,000 per year, and started reducing itemized deductions for those with incomes above $200,000. Additionally, Maryland now applies a 3% sales tax to digital products and technology services. These moves come amid nationwide conversations about how states should manage their finances and raise funds to provide important public services. Maryland's actions reflect a broader trend of states carefully reshaping their tax policies to meet changing economic realities and societal priorities.

Tax Tug-of-War: Balancing Business Breaks and Climate Stakes

Congress is currently debating important tax changes that could impact individuals, businesses, and renewable energy projects. Lawmakers are working to continue certain tax cuts originally introduced by President Trump in 2017, including a policy called "bonus depreciation" which allows businesses to immediately write off the full cost of new investments. However, this move could lead to a significant drop in government revenues—over $219 billion less in the next ten years. At the same time, legislators are considering rolling back some tax incentives introduced by President Biden that encouraged investment in renewable and clean energy projects. These proposed changes have sparked heated debate, as supporters believe they help economic growth, while critics are concerned about the impact on climate goals and the federal budget.

SALTy Debate: The Fight Over Tax Deduction Caps

The State and Local Tax (SALT) deduction allows taxpayers to deduct state and local taxes from their federal taxable income. A $10,000 cap was placed on this deduction in 2017 through the Tax Cuts and Jobs Act, causing increased conflict between legislators in recent years. This limit especially impacts residents in states with higher taxes because they can no longer deduct as much from their federal returns, potentially resulting in higher federal taxes. Currently, Congress is deeply divided on whether to raise this cap—some lawmakers propose increasing the limit to as much as $40,000, while others prefer a lower compromise of $30,000. With rising home costs, higher wages, and continuing inflation pressures across the country, the final decision over the SALT cap could significantly affect many households' finances.

“Tax Overhaul Sparks Debate: Economic Boost or Budget Bust?”

The passage of the "One, Big, Beautiful Bill" by the House of Representatives marks a major change in U.S. tax laws and has sparked intense debate about its economic impact on Americans. The bill would permanently extend individual tax rate reductions and increased standard deductions that were initially set to end in 2025, and would also introduce substantial new tax breaks geared toward supporting businesses, families, and seniors. However, experts from the Tax Foundation estimate that these adjustments could lower government revenues by approximately $4 trillion over the next ten years. People who support the bill argue it will boost economic growth and provide financial relief to many families, while critics express concerns about potentially growing government debt and the long-term effects on the nation's financial stability.

Trending now

Budgeting and Saving
Debt Management
Side hustle ideas to boost income
Investing basics for beginners