House Sends Sweeping Trump Tax Plan to the Senate Amid Bond Market Jitters
Financial markets got rattled as the House of Representatives green-lit President Donald Trump's latest pitch for permanent tax reform. Dubbed the Trump tax bill, the package promises tax breaks for families and businesses, hoping to shape the economy well into the next decade. But while supporters cheer, the bond market isn’t buying the optimism—yields spiked even before the ink dried.
This so-called "One, Big, Beautiful Bill" didn’t waste time. The House passed it on May 22, 2025, giving Trump’s core economic philosophy a renewed push. At its core, the bill locks in big 2017-era tax cuts, letting families and businesses enjoy the same breaks for years. But it goes further than before: there are expanded deductions for small businesses, new tax credits for families, protection measures for family-owned farms, and tax relief focused on seniors’ needs.
Here’s a rundown of the highlights:
- Permanent business tax deductions, giving company owners more certainty in long-term planning.
- Doubled exemptions for the estate tax—what critics call the "death tax"—making it easier to pass generational wealth, especially for farms.
- Child Tax Credits are bumped up and now automatically adjust for inflation, with an eye on helping middle-income families.
- Taxes fall away on gratuities, overtime earnings, and interest paid through car loans, so that every shift and every extra hour of work pays off a bit more.
- Senior-focused relief measures aim to let retirees keep more of their Social Security and investment income.
Backers of the bill, like the U.S. Chamber of Commerce, call it a game-changer for global competitiveness. Small businesses and family farms are at the center of the pitch. The American Farm Bureau Federation, a big voice among agricultural interests, said the revised reference prices and revamped tax incentives could help struggling family-owned farms stay afloat—and even thrive. Special provisions should make it less painful to hand down a business from one generation to the next, a sticking point for decades in rural America.
Meanwhile, Republicans point to studies that suggest workers’ wages could rise by over $11,000 each, with as much as $13,000 more in annual take-home pay for the typical family. Supporters say 7 million new jobs could be on the way, thanks to incentives designed to nudge companies into hiring on home soil rather than offshoring.
But the bill isn't all sunshine—critics are already worried about the price tag. The Congressional Budget Office, along with independent economists, warn the legislation may blow up the deficit over time, forcing the government to borrow more, just as the cost of debt climbs. And it’s not just talk. The bond market has reacted fast, with yields on treasuries shooting up since the bill moved forward. Investors are bracing themselves for even more government borrowing and the possibility that rising inflation could eat into their returns.
Senate on Deck, Fiscal Storm Clouds Gather
Now it’s up to the Senate. The House has laid down its marker, but turning the bill into law will take bipartisanship—a word that’s been hard to come by lately. Advocates hope for quick action before election season muddies the waters, but opposition leaders are pushing for a deeper look at how the plan would reshape the country’s finances for the long haul.
With the debt already topping $34 trillion, every new spending promise and tax tweak faces heavy scrutiny. The ripple effect of even talk of more borrowing shows just how sensitive markets are to signs of fiscal looseness. What happens next—both in Congress and on Wall Street—will test whether the promise of growth matches the reality of new IOUs stacked up in D.C.