President Trump Expected to Sign Tax, Policy Bill

The U.S. House of Representatives Friday afternoon passed the One Big Beautiful Bill Act, by a 218-214 vote, marking the final ballot on a bill that sped through Congress that includes new taxes on some institutional investors, various retirement and savings benefits, along with other tax and policy changes.

The vote came two days after the Senate approved its version of the bill by a 51-50 vote, for which Vice President J.D. Vance cast the tie-breaking vote. President Trump is expected to sign the bill at a planned White House ceremony on July 4.

The 870-page H.R. 1 renews several expiring provisions of the Tax Cuts and Jobs Act of 2017 and includes other provisions advocated for by the Trump administration. The bill also authorizes a $5 trillion increase in the national debt limit. 

The Congressional Budget Office and the staff of the Joint Committee on Taxation estimated that H.R. 1, as passed by the Senate on July 1, 2025, when compared with CBO’s January 2025 baseline budget projections, would increase deficits over the next decade by $3.4 trillion.

The bill does also raise some taxes. Notably, the anticipated excise taxes on investment income from endowments will increase to 8% for the largest, wealthiest colleges with at least 3,000 students, while institutions with fewer assets per student will be taxed at 4% or 1.4%. It appears that the final bill omitted a provision, that would have taxed qualified litigation proceeds received by third-party investors in litigation financing arrangements, that had been in the version of the bill passed by the Senate Finance Committee.

The Senate also removed from the bill changes the House had initially proposed to the Federal Employees’ Retirement System; and despite President Trump’s pledge to not tax Social Security, the bill provides for a temporary expanded deduction of up to $6,000 for individuals aged 65 and over, phased out for individuals making more than $75,000 and $150,000 for married couples filing jointly.

Several investment industry groups praised the bill’s passage.

The Securities Industry & Financial Markets Association supported the bill for extending “expiring individual and business tax provisions avoids dramatic tax increases that would negatively impact economic growth,” said SIFMA President and CEO Kenneth Bentsen, Jr., in a statement. 

Leader of the capital markets advocacy group also praised omission of Section 899 or the “revenge tax,” provision that had been intended to raise taxes on foreign investments in the U.S. 

“SIFMA appreciates that lawmakers chose to reject certain provisions that could have negatively impacted foreign direct investment in U.S. capital markets and financial assets which would have resulted in negative economic consequences for the markets and the nation,” Bentsen’s statement continued. 

The Investment Company Institute likewise praised the act’s anticipated effect on American investors.

“We are pleased to see Congress protect the tax treatment of voluntary retirement accounts like 401(k)s and IRAs, ensuring that more than 120 million Americans can continue building long-term financial security through tax-advantaged savings,” said ICI president and CEO Eric Pan, in a statement.

Still, Pan encouraged continued progress.

“[M]ore needs to be done. We encourage the administration and Congress to continue to prioritize policies that strengthen the retirement system and ensure U.S. capital markets remain attractive, accessible, and resilient,” Pan said in a statement. “Legislation introduced this session that would continue this momentum for American investors includes the GROWTH ACT, Increasing Investor Opportunities Act, Retirement Fairness for Charities and Educational Institutions Act, and Improving Disclosure for Investors Act.”

Key retirement provisions in the bill include:

• Section 71306, Permanent extension of safe harbor for telehealth services: codifies the safe harbor provision allowing high-deductible health plans to cover telehealth services without a deductible;
• Section 71307, Allowance of bronze and catastrophic health plans from the Affordable Care Act exchanges to be used plans in connection with health savings accounts;
• Section 71308, Treatment of direct primary care service arrangement: allows patients enrolled in high-deductible health plans with health savings accounts to participate in direct primary care benefits, and to pay direct primary care fees from their HSAs;
• Section 71401, exclusion for employer payments of student loans: makes permanent the exclusion for qualifying student loan payments made by employers. This provision would also adjust for inflation the maximum exclusion for taxable years beginning after 2026;
• Section 70204, Trump accounts and contribution pilot program: This provision was changed by the Senate and now creates Trump accounts as individual retirement accounts under IRC 408(a), but distributions before until age 18 are prohibited, while other distribution restrictions have been eliminated, according to an analysis of the bill by Kendra Isaacson, principal of consulting firm Mindset. Trump account investments are restricted to mutual funds or exchange traded funds that track the returns of a qualified index, do not use leverage, do not have annual fees and expenses of more than 0.1% of the balance of the investment among other criteria. Because of the classification the accounts as IRAs, rollovers and employer contributions are now permitted. The accounts have an annual $5,000 cap on contributions. A pilot program is established, to provide $1,000 to U.S. children who are citizens, have a Social Security number and were born between January 1, 2025, and December 31, 2028; and,
• Section 70116, Extension and enhancement of savers credit allowed for ABLE contributions: The provision would expand the Saver’s Credit to include ABLE accounts, also known as 529 ABLE or 529A accounts.