The One Big Beautiful Bill Act (OBBBA), signed into law by President Trump on July 4 enacts sweeping changes to the U.S. tax code, spending priorities, and entitlement programs. Passed narrowly along party lines in both chambers of Congress, the 887-page bill makes permanent the 2017 Tax Cuts and Jobs Act provisions and introduces new deductions while offsetting some of the cost with deep cuts to social programs.
While the fiscal impact is expected to add up to nearly $4 trillion in deficits over the next decade, the law brings meaningful tax relief to specific groups of Americans, especially higher earners and targeted industries, who now find themselves on the winning side of one of the most consequential tax overhauls in recent history.
Read below to learn more about the biggest winners of the OBBBA.
1. Wealthy taxpayers and high-income households win
The Act delivers substantial gains for high-income Americans. According to the Tax Policy Center, households earning above $217,000 will receive more than two-thirds of the total tax cuts, with those making over $1.1 million taking home nearly a quarter of the benefits. The average tax cut for the top 20% of earners is estimated at $12,500 in 2026, boosting their after-tax income by 3.4%.
The graph below from the Tax Policy Center and Penn Wharton on the OBBBA’s impact on after-tax income in 2026, shows that the top 1% could see increases up to 4.9%, while the bottom 20% may face declines as steep as 10.8%.
Beyond annual income tax savings, wealthy families also gain significant advantages in wealth transfer. The OBBBA locks in a $15 million per individual exemption federal estate, gift, and generation-skipping transfer taxes (indexed to inflation starting in 2026), preventing the expected reversion to $7 million. This change supports lifetime gifting and wealth preservation strategies, especially for ultra-high-net-worth families.
2. Corporations and domestic manufacturers benefit
Among the biggest winners under OBBBA are corporations. The law makes the 2017 corporate tax rate of 21% permanent, avoiding a scheduled reversion to the previous 35% rate. It also expands tax breaks for domestic manufacturing, allowing firms to fully expense the cost of building new factories and purchasing equipment as long as the projects begin after January 19, 2025, and are in service before 2031.
As advisors, it’s more important than ever to guide clients through the complexities of this sweeping legislation.
In addition to targeted industry breaks, the Act extends the Opportunity Zone program through 2033, offering long-term tax incentives for investors who direct capital toward economically distressed communities. The Act allows investors to defer and potentially reduce capital gains taxes by investing those gains in designated low-income areas. This move is expected to channel billions into real estate and business development in under-resourced areas while preserving a key plank of the 2017 tax code overhaul.
The legislation also maintains the 20% deduction for qualified business income (QBI) for pass-through entities such as LLCs and S corporations and liberalizes other provisions of the QBI deduction.
3. Fossil fuel industry returns
The OBBBA quietly hands a win to fossil fuel companies by rolling back several Biden-era renewable energy tax subsidies. Incentives for carbon capture and clean hydrogen are scaled back, while certain oil and gas tax preferences—previously under threat—are left untouched.
The oil and gas sector also scored major wins with new mandates for lease sales on public lands and federal waters in Alaska, the Gulf of Mexico, and parts of the western U.S. The Act reinstates lower royalty rates and expands subsidies for carbon-capture projects used in enhanced oil recovery, a process that injects CO2 into depleted oil wells to extract additional petroleum. Drillers are also allowed to deduct certain development costs despite the corporate alternative minimum tax, which many companies in other sectors must now adhere to.
This policy shift is seen as a political and economic win for oil and gas producers, especially in states like Texas and Louisiana, where the industry is a major employer. The Act does not introduce new environmental regulations or carbon pricing, offering fossil fuel firms a regulatory reprieve.
4. Families with children see expanded benefits
The Act expands the child tax credit by $200, raising it to $2,200 and making it permanent with inflation adjustments. In a nod to long-term savings, it also creates $1,000 “Trump accounts” for children born in 2025 through 2028, allowing annual contributions of up to $5,000.
These tax-deferred Trump accounts work similarly to IRAs: Children born 2025–2028 (with SSNs for both parents and child) receive automatic enrollment and a $1,000 federal deposit. Contributions can total $5,000 annually until age 18, with employers able to add up to $2,500 tax-free. Withdrawals begin at age 18 (half the balance) and 25 (full balance), with funds used for college, small business, or first-time home purchases taxed at favorable capital gains rates. Non-qualified withdrawals face ordinary income tax rates, and any remaining balance is taxed at age 31. The program expires in 2028.
However, the benefits are not universal. Some children will no longer qualify if neither parent has a Social Security number. While these policies help middle- and upper-middle-class families, the structure and eligibility criteria limit their reach among low-income households.
5. Temporary relief to homeowners in high-tax states
After much legislative wrangling, the Act temporarily expands the SALT (State and Local Tax) deduction from $10,000 to $40,000, adjusted for inflation through 2029. The SALT deduction allows taxpayers to deduct state income taxes and local property taxes from their federal taxable income. The benefits phase out entirely at $600,000 of income, but households earning between $200,000 and $500,000 in high-tax states like New York and California stand to gain thousands in deductions.
This marks a significant expansion from the longstanding $10,000 cap introduced in 2017. That said, the deduction snaps back to $10,000 in 2030, which could trigger renewed tax planning headaches in the future.
6. Temporary relief to senior citizens
The OBBBA introduces a $6,000 deduction for seniors aged 65 and over, fulfilling a campaign promise to reduce the tax burden on retirees. When combined with the existing enhanced standard deduction for seniors, this results in total deductions of up to $23,750 for individuals and $46,700 for couples filing jointly.
According to the Council of Economic Advisers, this new deduction offsets the full value of taxable Social Security benefits for 88% of recipients, benefiting more than 51 million seniors. However, critics warn this could accelerate the depletion of Social Security trust funds, which are already projected to face shortfalls by 2034.
7. Temporary: Workers earning tips and overtime get additional deductions
Fulfilling campaign promises, the Act introduces deductions for tipped and overtime workers. These provisions, effective through 2028, are phased out for higher-income workers (see below) but deliver significant tax relief to many in the hospitality and hourly labor sectors.
The law exempts the first $25,000 of annual tip income from federal taxes through 2028. According to the White House Council of Economic Advisors, this could save qualifying workers about $1,700 per year. However, the practical impact for tipped workers may be limited: More than one-third of tipped workers have incomes low enough that they don’t file federal returns, meaning many may not benefit from this deduction in practice.
The OBBBA also introduces a temporary tax deduction for overtime income. Workers can deduct up to $12,500 in overtime wages, capped at an income limit of $150,000 for individuals and $300,000 for joint filers. The estimated savings range from $1,400 to $1,750 annually. This is especially valuable for professions with consistent overtime pay, such as nurses, firefighters, and skilled tradespeople.
8. Temporary: Car buyers of American-made vehicles
Consumers purchasing new U.S.-assembled vehicles can now deduct up to $10,000 annually in car loan interest, provided the purchase falls between 2025 and 2028. This is a particularly strong benefit for middle- and upper-middle-class buyers, as the average new car price now exceeds $48,000, and average car loan interest paid in 2024 topped $1,300.
Eligibility phases out between $100,000 and $150,000 for individuals and between $200,000 and $250,000 for joint filers, ensuring the benefit is targeted but still generous to higher earners.
In conclusion…
The One Big Beautiful Bill Act represents the most expansive tax overhaul in nearly a decade—and its benefits are far from evenly distributed. Corporations, wealthy households, and traditional industries like fossil fuels stand to gain the most from permanent cuts and expanded incentives.
Meanwhile, select groups of workers and middle-income earners enjoy targeted but temporary relief. For high earners and savvy planners, the law offers a rare opportunity to lock in wealth-building advantages for the long haul.
But these gains come with a steep price: The law is projected to add nearly $4 trillion to the deficit, with estimates rising above $5 trillion if temporary provisions are extended. The national debt could climb to 124%–130% of GDP by 2034, surpassing post–World War II levels and reducing fiscal flexibility for future crises.
As advisors, it’s more important than ever to guide clients through the complexities of this sweeping legislation. A clear understanding of the law’s provisions, expiration dates, and potential financial impacts is essential.
By proactively reviewing plans and adjusting strategies, we can help clients stay ahead of the changes and remain financially resilient in an increasingly uncertain fiscal environment.
Sources
- Laura Saunders. “How Trump’s Tax Law Will Impact Your Personal Finances.” The Wall Street Journal. July 3, 2025.
- Ashlea Ebeling. “SALT Deduction Cap Raised: What Homeowners Need to Know.” The Wall Street Journal. July 4, 2025.
- “Highlights From the Front Page: July 5–6, 2025.” The Wall Street Journal. July 6, 2025.
- “Winners and Losers: Corporate America Reacts to the Big Bill.” The Wall Street Journal. July 3, 2025.
- “Legislative Impact Summary: What the GOP Tax Overhaul Means.” NBC News. June 30, 2025.
- “Fossil Fuels and the Energy Sector: Quiet Winners in Trump’s Tax Law.” The Wall Street Journal. July 4, 2025.
- Forbes. “Estate Planning and the Final OBBBA: Key Changes High-Net-Worth Individuals Must Know.” July 3, 2025.
- USA TODAY. “The Winners (and Losers) in Trump’s ‘Big Beautiful’ Tax Bill—Now Law.” July 3, 2025.
- MarketWatch. “Trump’s Big Bill Just Passed the House. Here Are the Winners and Losers.” July 4, 2025.
- Tax Foundation. “One Big Beautiful Bill Act Tax Policies: Details and Analysis.” July 3, 2025.
- MarketWatch. “Tax Breaks and Spending Cuts: Here Are the Winners and Losers in Trump’s Big Bill.” July 4, 2025.