Part 2: "Decoding the One Big Beautiful Bill Act": Who the OBBBA Impacts and the Key Provisions to Know

Welcome back to "Decoding the OBBBA." In Part 1, we defined the One Big Beautiful Bill Act as a massive piece of legislation centered on permanent tax extensions and significant cuts to social safety nets. Now, we dive into the question: Who wins, who loses, and what are the specific policy levers that will affect you, your family, and your community? The OBBBA's impact is not uniform; it creates clear beneficiaries and significant pressure points across various demographics.

The Clear Winners: High-Income Individuals, Wealth Holders, and Businesses

The core of the OBBBA's tax provisions is the permanent extension of the Tax Cuts and Jobs Act (TCJA) individual income tax rates, which were set to expire in 2026.

• Tax Permanency: The lower individual tax rates—including the top 37% bracket—are now locked in, providing certainty and a sustained benefit primarily for high-net-worth individuals and owners of pass-through businesses.

  
  

• The Wealth Transfer Boom: Beginning in 2026, the Estate and Gift Tax Exemption is permanently increased to an inflation-adjusted $\$15$ million per individual (up to $30 million for a married couple). This is a monumental change that allows for the tax-free transfer of generational wealth, primarily benefiting the wealthiest families.

  
  

• The Business Investment Sweetener: Businesses see a huge win with the permanent extension of 100% Bonus Depreciation. This allows companies to immediately deduct the full cost of most new and used equipment and assets, a massive incentive for capital expenditure and a significant reduction in taxable income.

  
  

• Targeted Worker Deductions (Temporary): Certain workers can claim a new, temporary deduction (through 2028) on qualified tips (up to $25,000) and qualified overtime pay (up to $12,500 for single filers). This is a key provision intended to appeal to the middle and working class, though it phases out for higher earners.

  
  

The Most Affected: Low-Income Families and Vulnerable Populations

The OBBBA pays for its tax cuts, in part, by making historic structural changes to vital social assistance programs, which will disproportionately affect low-income and vulnerable Americans:

• SNAP (Food Assistance) Cuts: The Act implements the largest cut in the history of the Supplemental Nutrition Assistance Program (SNAP), estimated to impact up to 4 million people:

  • New Work Requirements: It raises the age limit for work requirements for Able Bodied Adults Without Dependents (ABAWD) from 54 to 64. Crucially, it removes exemptions for veterans, people experiencing homelessness, and young adults who recently aged out of foster care.

    
    

• Medicaid Restructuring: The bill cuts the rate of growth of federal funding for Medicaid over time and tightens eligibility rules.

  • Mandatory Work Requirements: States will be required to impose an 80-hour-per-month work requirement for low-income adults ages 19-64 to maintain eligibility.

  • Increased Cost-Sharing: Certain low-income individuals in Medicaid expansion states may now face higher co-payments for services (up to $35 per service).

  
  

• The Clean Energy Sunset: Provisions established under the Inflation Reduction Act for clean energy incentives are accelerated to expire. Consumers planning on purchasing electric vehicles lose the New and Used Clean Vehicle Credits by the end of 2025. Homeowners lose the Residential Clean Energy Credit (e.g., for rooftop solar) and the Energy Efficient Home Improvement Credit after 2025.

Provision Type	Key Change	Primary Beneficiary / Impacted Group
Tax Permanency	Permanent extension of TCJA tax rates (top rates at 37%)	High-Income Earners
Wealth Transfer	Estate & Gift Tax Exemption increases to $15 million	Ultra-High-Net-Worth Families
Business Incentive	100% Bonus Depreciation made permanent	Corporations & Business Owners
Safety Net	New, tougher work requirements for SNAP & Medicaid	Low-Income / Unemployed Individuals
Consumer Credit	Clean energy vehicle and home credits expire Dec 2025	Consumers planning EV or solar purchases

The Unintended Complexity

For the average American, the OBBBA is a mixed bag of temporary breaks and long-term complexity. For example, while the Child Tax Credit permanently increases to $2,200 per child, the temporary nature of the tip and overtime deductions (expiring in 2028) means the tax code will change again in a few years. Understanding these timelines is crucial to effective financial planning.

Part 3 (Week 2, Mon)

What does this mean for organizations and businesses?