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The Hill
an hour ago
- Business
- The Hill
Trump's ‘big, beautiful bill' could spell trouble for gamblers: What to know
A gambling tax provision in President Trump's megabill that passed Congress earlier this month is ruffling feathers on both sides of the aisle. Tucked into the approximately 1,000-page tax and spending cuts plan is a measure that experts say will make it more expensive for gamblers to lose, and that some Republicans say they weren't even aware of until after it passed. Here are a few things to know about the change to the gambling tax. What does the gambling tax provision do? A major component of the plan passed by Republicans earlier this month was to extend expiring tax cuts enacted by Trump's signature 2017 tax law. But among the host of added tax changes in the plan, was a provision that reduces the tax deduction for gambling losses from 100 percent to 90 percent. The plan would take effect at the start of next year, absent congressional action. Asked about the plan in recent days, some GOP senators have downplayed the impact of the bill on their constituents. But members on both sides have pointed to the swift pace at which Congress moved to get Trump's tax agenda across the finish line. 'There was a reason I wanted a conference once we actually had language, and before we had motion to proceed, I wasn't granted that conference,' Sen. Ron Johnson (R-Wis.), a member of the Senate Finance Committee, said Tuesday. 'I knew we had all kinds of provisions that we had never discussed about in conference, and I wanted to discuss it,' he said. 'I wanted to wait.' Who is affected? Experts say the measure could wind up meaning big trouble for professional gamblers. 'It doesn't affect the population broadly, but this could have a very, very large impact on casino operators and the big group of people that we see this affecting are professional gamblers,' Adam Hoffer, director of excise tax policy at the Tax Foundation, said in an interview this week. Hoffer said the measure would lead to gamblers having to pay more when they break even, describing a scenario in which a professional spends a million dollars a year buying into poker tournaments. 'Over the course of that year, they also win, they cash out a total of a million dollars,' he explained. 'Now that's break even. They didn't actually make any money there. And in previous years, before this tax provision change, they wouldn't owe any net income.' 'However, with this change, instead of being able to deduct the million dollars that they spent on buying into poker tournaments, they're only allowed to deduct $900,000,' he said. He and others have also raised concerns that legislation puts at risk a growing sports betting industry and incentivizes offshore gambling. How did it get in the bill? The Senate's chief tax writing committee said the provision made it into the plan due to the strict rules governing the complex process Republicans used to pass the package. Under the wonky maneuver known as budget reconciliation, Republicans were able to greenlight the major tax bill through Congress without Democratic support in the Senate, bypassing the 60-vote threshold needed for most legislation to make it out of the upper chamber. But the process comes with limitations. A spokesperson for the committee said to comply with reconciliation rules, every provision from the president's 2017 tax law 'needed to be modified to create a budgetary effect.' 'In order to retain the gambling loss provision, it was changed to 90 percent,' the spokesperson said. What will it save? An estimate from the Joint Committee on Taxation that pegs the projected revenue generated from the provision at about $1.1 billion over roughly the next decade. By contrast, experts have pointed to overall estimates of the package, which project the plan would add more than $3 trillion to the nation's deficits over the same timeframe. Much of the cost comes from the tax proposals in the plan. At the same time, the new law includes major changes that could lead to hundreds of billions dollars in reduced spending for Medicaid and the Supplemental Nutrition Assistance Program, new restrictions for student loan borrowers and the phaseout of multiple popular repayment plans, and changes targeting the Consumer Financial Protection Bureau's funding. 'The tax burden doesn't fall on the industry itself and has no tax implications for the gambling industry,' Lucy Dadayan, a principal research associate with the Urban-Brookings Tax Policy Center, said in an email. 'Still, the gambling industry is concerned the reduced profitability for players could dampen demand and push players into the unregulated gambling markets.' Will Congress undo it? Some Democrats have already been sounding alarm over the measure, which Sen. Catherine Cortez Masto (D-Nev.) unsuccessfully sought to undo earlier this month. 'It will do irreparable harm to our nation's gaming industry if it takes effect — especially in Nevada,' the Nevada Democrat said at the time, warning it would 'disincentivize' gamblers. The Senate Finance Committee said Chairman Mike Crapo (R-Idaho) is 'open to receiving feedback from affected stakeholders and learning more about industry reporting and compliance.' 'While the committee heard from gaming associations on other provisions after the Finance Committee's text was released on June 16, there were no concerns raised with lowering the threshold,' they added. Sen. Ron Wyden (Ore.), top Democrat on the Finance Committee, was pressed on Tuesday whether negotiations on the matter have reached leadership level as some Republicans have expressed interest in bipartisan tax action this year. Wyden said Cortez Masto immediately talked to him about the matter and that he intends to 'help in any way that I can,' calling it a 'very important issue to her constituents.' 'The Republicans did, according to my colleague, great damage to the economy of her state simply because they didn't consult with anybody,' he argued. 'They rushed it through.'
Telegraph
5 hours ago
- Business
- Telegraph
How Trump ‘eliminated' inheritance tax for farmers – while Starmer ramped it up
When Donald Trump generously interrupted his golfing holiday for a meeting with Sir Keir Starmer earlier this week, he did not shy away from sharing a few home truths with the Prime Minister. In between calling Sadiq Khan 'nasty', telling Sir Keir to cut taxes to beat Nigel Farage and expressing his view that 'wind [power] is a disaster', the American president raised the spectre of inheritance taxes, on farmland in particular. While Trump has, in effect, eliminated inheritance tax (IHT) for all but the most expensive estates in the US, Sir Keir has gone the other way, moving to remove relief on IHT for agricultural land. During the meeting at Turnberry, Trump's golf course south-west of Glasgow, the president stopped short of explicitly criticising Sir Keir's policies, but he noted that farmers in the US had been driven to suicide by the previous tax regime and that he had taken steps to cut inheritance tax in both of his presidencies. 'We ended the estate tax,' he said, citing a federal tax which is levied on the transfer of an estate of a person who has died. 'There's no estate tax on farmers, so when a parent leaves their farm – because a lot of these farms, they don't make a lot of money, but it's a way of life and they love that way of life.' Trump's Tax Cuts and Jobs Act 2017 during his first term raised the individual exemption for estate tax – not just on farms – to $11m (£8.2m), and double that for a married couple, both linked to inflation. (Beyond the threshold, assets are taxed at a rate that rises to 40 per cent.) Speaking in North Dakota in 2017, Trump said he would 'protect small businesses and family farmers' by ending the estate tax, which was a 'tremendous burden' for the family farmer. Critics argued it was a gift to the super rich, which would scarcely benefit the people Trump claimed to be helping. 'The estate tax tends to draw out intense feelings, even as it's a relatively small tax provision,' says Alan Cole, a senior economist at the Tax Foundation, a non-partisan think tank based in Washington, DC. 'Surprisingly, a lot of people feel it's unfair. They know they are not going to pay it, but they think once you've paid income tax on something, the government shouldn't be involved. Then some people think inheritance is unfair.' Trump's policy has meant that more than 99 per cent of estates escape inheritance tax. President Joe Biden had repeatedly urged Congress to restore the previous limit of $3.5m (£2.6m), but nothing was passed. Trump's 'Big Beautiful Bill', which passed earlier this month, will increase the thresholds again, to $15m (£11.2m) and $30m (£22.5) from 2026. Some have sought to go farther still. In February, US Senate majority leader John Thune introduced the Death Tax Repeal Act – legislation aimed at repealing taxation altogether on the transfer of property when someone dies. Farming unions and politicians keen to court the rural vote are in favour of the move, claiming the tax is a 'boot on the neck farming families' which threatens the continuation of family farming in the country. Cole says that whatever the rights and wrongs of death duties, the prevailing political wind has been against them. 'When Democrats have tried to push back, they haven't been able to assemble a majority, where Republicans have been able to get everyone on board for expanding the estate tax exemption. It looks like Republicans have won on this issue over the last 10 years,' he says. The same cannot be said in the UK, which is going in emphatically the other direction on death duties for agricultural estates. Sir Keir's policy, announced in Chancellor Rachel Reeves's October budget, will introduce an effective inheritance tax of 20 per cent on farm and business assets above £1m. It has provoked fury among farmers, even as the Treasury has claimed 75 per cent of farm estates will remain unaffected. More than 20,000 people protested against the proposals in Whitehall last November, with television star Jeremy Clarkson – who appears in the Prime Video documentary series Clarkson's Farm – saying the proposals would be 'the end' for farmers. But Sir Keir and Reeves have stuck to their guns, despite counter-arguments that for all its divisive effects, the tax would not raise much money. In a BBC interview at the time of the protests, Reeves said: 'I don't think that it is affordable to carry on with a relief like that when our public services are under so much pressure.' One would expect Trump, a Republican, and Sir Keir, the leader of the Labour Party, to disagree ideologically on inheritance tax. But the difference of views Trump alluded to at Turnberry also reflects the different political power of farming in the two countries. In the US, 1 per cent of all employment is in farming, versus around 0.8 per cent in the UK. Farming is 0.9 per cent of total US GDP, 0.6 per cent of British GDP. And while the UK has the National Farmers' Union (NFU), the US has several strong lobbying groups, including the Farm Bureau, as well as groups representing specific commodity interests. What's more, the US political system disproportionately skews towards rural voters. Every state gets two senators regardless of population, meaning sparsely populated, agriculture-heavy states such as Wyoming and North Dakota carry the same legislative weight as California or New York. Before Trump's One Big Beautiful Bill passed, Randy Feenstra, a Republican representative in Iowa, echoed the president's appeal to farmers. 'Thank you to President Trump for noting that the 'One Big Beautiful Bill' will virtually eliminate the death tax!' he wrote on social media. 'This is an unfair double tax on our family farms and small businesses. By delivering additional relief from the death tax, we are investing in our rural communities.' Although farmers may not make up a large percentage of the total population by pure numbers, they can have an emotive effect in elections. Rural voters who are not farmers themselves are likely to be swayed by farming interests. Farmers do not have the same leverage in the UK. 'While the farming environment in the US and UK are very different, farmers in both countries are land-rich but cash-poor, and the president was right to point that out,' says Tom Bradshaw, the president of the NFU. 'The US recognised that such a tax wasn't conducive to running family businesses and producing food, and that it was having a detrimental impact on farmers' well-being. As is right in that situation, it took action to rectify the policy,' he adds. Meanwhile, in Britain, Labour's approach has resulted in a record number of farms (6,365) being forced to close for good in the past 12 months. The majority of the closures took place during the first six months of this year. Despite the fallout, Bradshaw says that British farmers are not seeking to avoid inheritance tax altogether. 'While we are not asking the UK Government to completely abolish inheritance tax, we are asking them for some introspection. Because the current policy fails to achieve the Government's stated intentions of closing a loophole and protecting family farms,' he says. Instead, the NFU has proposed a 'claw-back' method of applying IHT, in which the tax would be applied to assets disposed of only within a seven-year period after death. This would mean the tax is paid only when the finance is available to do so, and not if the farm is kept in the family. '[The method] allows the Treasury to raise revenues without tearing apart farming families, and removes the extreme mental toll this is placing on some members of our community,' Bradshaw says. Labour cultivated – and won – a surprising number of rural votes in the general election last year. Since then, however, it has shown little sign of wanting to consolidate those swings. As well as the farm tax, it has announced plans to increase solar farms, cut Defra's budget in real terms and increase taxes on double-cab pick-up trucks, often used by farmers. A poll of rural voters last December found that 66 per cent of voters think Labour neither understands nor respects rural communities. 'We aren't going away,' said Victoria Vyvyan, the president of the Country Land and Business Association, writing in The Telegraph. 'We aren't a problem to be managed or a narrative to be changed. We are an entire community under attack, and we will not allow [Sir Keir] to reset this Government's reputation until he resets its relationship with rural Britain.' The Labour government led by Tony Blair was also strained by its relationship with rural communities, over foot and mouth and Countryside Alliance protests about the fox-hunting ban. In Blair's memoir, A Journey, he wrote that the fox-hunting ban was 'one of the domestic legislative measures I most regret' and that he had been 'ignorant' of the strength of feeling in the countryside. Labour's present policies suggest it has chosen not to take their most successful leader's lessons on board, and that a fight with the countryside is one it is willing to pick. To judge by the conversation in Turnberry on Monday, on the other hand, Trump understands only too well the power that farmers – and death duties – can have: emotionally, economically and electorally.
Newsweek
6 hours ago
- Business
- Newsweek
Food Prices Will Rise Under Trump, Group Warns
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. President Donald Trump's tariffs, scheduled to increase on August 1, could result in significantly higher prices for a range of food groups. This is according to an analysis published Monday by the bipartisan Tax Foundation, which found that these will impact nearly 75 percent of U.S. food imports, which it said will "likely lead to higher food prices for consumers." Newsweek reached out to the White House via email for comment. Why It Matters It has repeatedly been warned that the higher import taxes implemented as a result of the Trump administration's economic agenda will increase costs for U.S. businesses reliant on foreign goods or components, and that this will translate into higher consumer prices as companies pass along these added expenses. What To Know According to the Tax Foundation, citing data from the U.S. International Trade Commission, 74 percent of the $221 billion worth of imported food products last year would be subject to the new administration's tariff policies. Among specific products, liqueurs and spirits were the most imported category last year, followed by baked goods, coffee, fish, and beer. Together, these accounted for roughly 21 percent of total food imports. Should reciprocal tariffs go into effect on August 1, following a second delay after their announcement in early April, exporting countries will again face duties ranging from the global baseline of 10 percent to over 30 percent in many cases. The administration has defended tariffs as a necessary tool to amend historic trade imbalances, while boosting U.S. manufacturing and increasing demand for domestically sourced goods. However, the think tank notes that many organic foods, such as bananas, cannot be "onshored" due to the climates required for production, the land necessary to meet U.S. demand and the fact that consumers "often prefer the foreign alternative to American-grown products." Main: File photo of Chiquita brand bananas for sale at a grocery store in Zelienople, Pennsylvania. Inset: President Donald Trump at the White House on July 22, 2025. Main: File photo of Chiquita brand bananas for sale at a grocery store in Zelienople, Pennsylvania. Inset: President Donald Trump at the White House on July 22, 2025. Chip Somodevilla // AP Photo file The Tax Foundation noted that there are several exemptions to the tariffs, which could lessen the overall price impact, including for goods covered by the United States-Mexico-Canada Agreement (USMCA). This allows around 63 percent of agricultural imports from Canada and Mexico—America's top two food exporters—to flow into the U.S. without being subject to Trump's import taxes. In addition, trade deals struck by the Trump administration, including with Indonesia, Japan and, most recently, the European Union, cap tariffs at rates below the levels originally unveiled by the president on "Liberation Day." However, the president has also announced new duties in recent weeks, including a 50-percent tariff on Brazil, the fourth-largest exporter of food products to the U.S., according to the Tax Foundation. Meanwhile, Trump has increased tariffs on imports not covered by the USMCA, which are currently set at a 25 percent tariff, but set to rise to 30 percent and 35 percent for Mexico and Canada, respectively, come August 1. What People Are Saying The Tax Foundation, in the report released Monday, wrote: "President Trump has often defended tariffs on the grounds that they will boost domestic production and create jobs. However, in the case of food imports, it is often difficult or impossible to onshore production due to land scarcity and a lack of suitable climates for certain goods. Consumers also often prefer the foreign alternative to American-grown products. This means tariffs on food imports will likely lead to higher food prices, making consumers worse off." What Happens Next On Friday, the pause on reciprocal tariffs will end, and countries unable to secure deals before this deadline will see their rates revert to early April levels. Speaking to Fox News recently, Commerce Secretary Howard Lutnick said that there would be no further tariff extensions beyond this date. "No extensions. No more grace periods," Lutnick said. "August 1, the tariffs are set. They'll go into place."
CNBC
14 hours ago
- Business
- CNBC
Trump's tariffs could soon bring higher food prices for some Americans, analysis finds
President Donald Trump's blanket tariffs scheduled to begin on Aug. 1 could soon bring higher prices on certain foods, according to some experts. Tariffs are a tax imposed by foreign nations, paid by domestic companies that import goods or services. U.S. consumers are expected to pay higher prices via companies negatively impacted by the trade policy. One of the goals of Trump's tariffs is to drive demand for American products. But certain items, such as Brazilian coffee, aren't produced domestically. Other imports, like bananas, have limited U.S. production, which wouldn't meet American demand, according to a Tax Foundation analysis published Monday. More from Personal Finance:Credit cards are an 'amazing tool' for your wedding, expert saysTrump floats tariff 'rebate' for consumers. Experts say it may be a challengeEven many high-earning Americans don't feel wealthy. Here's why In some cases, U.S. consumers may decide to pay more for these imported food products rather than choosing a substitute, wrote Tax Foundation senior economist Alex Durante. In 2024, U.S. food product imports totaled about $221 billion. Most of these products already face tariffs ranging from 10% to 30%. However, levies could exceed 30% for some countries if Trump's Aug. 1 tariffs go into effect, the Tax Foundation found. "We could see some large movements in prices over the next few months if the administration holds firm to that Aug. 1 deadline," Durante told CNBC. The top five imported foods by volume that could face tariffs are liqueurs and spirits, baked goods, coffee, fish and beer, which account for roughly 21% of total U.S. food imports, according to the Tax Foundation analysis. Grocery prices were about 2.4% higher than one year ago, according to the latest inflation report based on June data. But the full impact of Trump's tariffs is not yet reflected, experts say. "It's way too soon for the administration to be doing a victory lap because most of their planned tariff increases have not gone into effect yet," Durante told CNBC. A separate analysis by The Budget Lab at Yale, also from Monday, estimated that tariff price increases to date will raise food costs by 3.4% in the short-run, and that prices will stay 2.9% higher in the long-run. Fresh produce could initially be 6.9% more expensive while stabilizing at 3.6% higher, the analysis found. "The Administration has consistently maintained that the cost of tariffs will be borne by foreign exporters who rely on access to the American economy, the world's biggest and best consumer market," White House spokesperson Kush Desai told CNBC in a statement. Desai also shared a July analysis from the White House's Council of Economic Advisers, which showed the prices of imported goods, as measured by the personal consumption expenditure price index, fell from December through May.
Yahoo
a day ago
- Business
- Yahoo
Who Benefits From Tax Changes in Trump's ‘Big Beautiful Bill'?
President Donald Trump signed the One Big Beautiful Bill Act into law, marking the largest tax package in recent American history. The legislation promises sweeping changes across the tax landscape, extending previous cuts while introducing new provisions that affect millions of Americans. However, analyzing the distribution of these benefits reveals a complex picture of who truly gains from these changes — we'll explore this below. For You: Read Next: The Big Winners: High-Income Earners Lead the Pack The One Big Beautiful Bill is projected to reduce federal revenues by about $5 trillion between 2025 and 2034, according to the Tax Foundation. Analysis by ITEP shows that 69% of net tax cuts in 2026 will go to the top 20% of earners and the wealthiest 1% receive an average annual tax cut of $61,000, vastly exceeding benefits for other groups. 'The tax benefits primarily go to the 'rich,' and much of the cuts will negatively impact the 'poor,'' said Jay Zigmont, Ph.D., certified financial planner (CFP) and founder of Childfree Trust. The legislation is also expected to increase the national debt by $3.3 trillion to $4 trillion over ten years. Higher-income households benefit from the temporary SALT deduction increase, with significant relief for those in high-tax states. See More: Estate Tax Changes Favor Ultra-Wealthy Families The legislation permanently raises the estate and gift tax exemption to $15 million per individual or $30 million for married couples, per Tax Foundation analysis. This represents a dramatic increase from previous levels and removes uncertainty around potential reductions. 'The increase in the estate tax exemption to $15 million is a great example of a benefit solely for those with very high net worths,' explained Zigmont. This change primarily affects families with substantial wealth, as most American households fall well below these exemption thresholds. The permanence of this provision ensures wealthy families can engage in long-term estate planning without concerns about future reductions. Middle-Class Benefits Come With Important Limitations The legislation includes several provisions targeting middle-income Americans, though their impact varies significantly by household circumstances. A new $6,000 senior bonus deduction benefits taxpayers aged 65 and older, but phases out for higher earners. According to AARP analysis, the deduction reduces to zero for single filers earning above $175,000 annually. The bill creates tax exemptions for tips and overtime pay, addressing campaign promises from the 2024 election. CNBC reported that workers can deduct up to $25,000 in tip income and $12,500 in overtime pay annually, with both benefits phasing out for higher earners. However, Zigmont shared important limitations: 'The deductions for tips and overtime are limited' and 'both are temporary cuts' lasting only through 2028. New Programs Target Future Generations Trump Accounts represent a novel approach to childhood savings, providing $1,000 government contributions for babies born between 2025 and 2028. According to White House statements, these accounts will be a benefit to children by way of compounded savings. Parents can contribute up to $5,000 annually, with funds growing tax-deferred until age 18. Zigmont shared potential market effects of these. 'The plan is for the government to provide $1,000 for each child when they are born into an account that needs to be invested in a broad market index,' he said. With approximately 3.6 million births annually, this creates substantial ongoing market investment. Significant Cuts Impact Vulnerable Populations The legislation introduces about $1 trillion in Medicaid cuts over ten years, threatening coverage for up to 11.8 million Americans, per the Congressional Budget Office. 'People who rely on Medicaid and SNAP programs are most at risk,' Zigmont said — with $230 billion in SNAP reductions affecting 22.3 million families, Urban Institute reports. 'Women's health in rural areas is likely to be hurt,' Zigmont said, as Medicaid cuts and Planned Parenthood defunding further limit access to essential healthcare in underserved communities, shifting more costs onto states and disproportionately hurting those already struggling. Long-Term Fiscal Consequences Raise Concerns The OBBBA is projected to add between $3.3 trillion and $4 trillion to the national debt over the next decade, according to Zigmont. The Tax Foundation estimates this will push the U.S. debt-to-GDP ratio up by 9.6 percentage points to 126.7% by 2034. This rising debt could force future tax hikes or spending cuts, limiting government flexibility and straining the economy. While the bill delivers substantial, lasting benefits to high-income households, middle-class gains are smaller and temporary. 'At some point that debt is going to be due and we have no solution at this point,' Zigmont added. Editor's note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on More From GOBankingRates Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why This article originally appeared on Who Benefits From Tax Changes in Trump's 'Big Beautiful Bill'? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
