Trump’s Largest Tax Cut in U.S. History Will Take Effect This Year

President Donald J. Trump signed The One Big Beautiful Bill into law, enacting what the White House describes as the largest tax cuts in American history. Including provisions that eliminate federal income tax on tips, overtime pay, and Social Security income for most taxpayers.

The law was formally signed on July 4, 2025, and the White House confirmed the provisions are now enacted.

Importantly, the changes apply to the 2025 tax year, meaning many Americans could see higher take-home pay and larger refunds when filing returns.

The legislation marks a broad shift in federal tax treatment for wage earners and retirees. Positioning disposable income growth as a central policy outcome.

The One Big Beautiful Bill and How It Changes Taxes

The “One Big Beautiful Bill” eliminates federal income tax on tip income and overtime pay, increasing after-tax earnings for hourly and service-sector workers.

Moreover, the law also removes federal income tax on Social Security income for most recipients. Directly impacting retirees who previously faced taxation on benefits above certain thresholds.

The administration states the bill extends existing individual rate structures while adjusting deductions and credits in ways intended to increase net income for working and middle-class households.

Additionally, other provisions include expanded child tax credits and changes to business deductions aimed at supporting domestic investment.

By removing federal taxation on categories such as tips and overtime, the law effectively increases liquidity for millions of workers without requiring wage renegotiations.

The White House frames the package as the most significant tax relief legislation enacted in U.S. history.

Bitcoin Price Today

Increased Disposable Income Could Affect Crypto Markets

While the legislation is not crypto-specific, broader disposable income expansion can influence risk asset allocation patterns.

In the past, periods of increased tax refunds or fiscal stimulus have correlated with incremental inflows into equities and digital assets as retail participants deploy excess liquidity.

Indeed, higher net pay from untaxed overtime and tips could translate into incremental savings or investment capital among younger and working-class demographics.

Also, tax refund season has previously coincided with elevated retail participation in crypto markets. Therefore, refunds or reduced tax burdens could modestly expand retail buy pressure.

Institutional flows and macro liquidity remain the dominant drivers of crypto pricing. However, an increase in retail capital injections during filing season can contribute to short-term volume expansion.

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