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Tax Cuts & Jobs Act Extension

For a more detailed analysis, check out the link below from Michael Kitces.

Henry-Moreland, Ben. “Michael Kitces.” Nerd’s Eye View | Kitces.com, 16 July 2025, www.kitces.com/blog/obbba-one-big-beautiful-bill-act-tax-planning-salt-cap-senior-deduction-qbi-deduction-tax-cut-and-jobs-act-tcja-amt-trump-accounts/.

 

The Ethical Concerns of the OBBBA: Who Really Wins?

One of the most common jokes in politics is that elected officials never keep their promises. But with the One Big Beautiful Bill Act (OBBBA), former President Trump appears to be taking a different approach. Love him or hate him, he is following through on many of the commitments he made during his campaigns. That is rare in Washington.

That said, this bill raises a number of serious ethical concerns. Some of them we share. Others, often highlighted in the media, may not be as problematic as they seem on the surface.

Let’s take a closer look at both.

 

Legitimate Ethical Concerns

1. Deficit Spending and the National Debt

Perhaps the most pressing issue with the OBBBA is that it continues the trend of increasing federal spending without real efforts to cut costs elsewhere. The national debt continues to rise, with the debt ceiling projected to increase by another $5 trillion under this legislation.

In theory, some of the tax changes could spur economic activity and increase government revenue, but government estimates have historically underestimated the revenue side of tax cuts. Even optimistic projections do not guarantee that this bill will improve the federal balance sheet.

In short, the bill fails to take seriously the long-term consequences of persistent deficit spending. That is not responsible governance, and it is not ethical stewardship.

2. No Tax on Tips and Overtime

This sounds like a win for workers, but it raises a fairness issue. Why should tax breaks be limited to hospitality workers or hourly employees who work overtime? What about other hardworking Americans—nurses, tradespeople, or sales staff?

The overtime provision is also more limited than it appears. It only allows a deduction for the “half” portion of the “time and a half” overtime rate. This is being overhyped in public messaging.

Similarly, the tip income exemption will likely only apply to certain industries, creating yet another category of taxpayer favoritism. Broad tax relief across income classes would be a more ethical approach.

3. Car Loan Interest Deductions

While a deduction for car loan interest may sound beneficial, in practice it encourages debt. For example, if you pay $1,500 in interest and receive a $225 tax benefit, you are still out $1,275.

This kind of deduction also risks inflating car prices across the board. As more people rely on financing to buy vehicles, dealerships may raise prices, impacting even those who pay cash.

We regularly see people make unwise financial decisions in pursuit of tax deductions. Spending a dollar to save a quarter is poor math. Encouraging debt through tax incentives is not good policy.

4. SALT Deduction Adjustments

The proposed increase in the State and Local Tax (SALT) deduction cap to $40,000 will only benefit a small percentage of taxpayers, primarily high earners who itemize their deductions.

It also raises a fairness concern. Why should homeowners with mortgages benefit more than those who rent or have paid off their homes? Policies like this reward indebtedness over financial responsibility and again favor certain classes of taxpayers.

Media-Fueled Concerns That May Be Overstated

1. Medicaid and Work Requirements

There has been significant public outcry over proposed Medicaid changes, but much of the concern is exaggerated.

The proposed changes largely reset Medicaid eligibility to pre-COVID levels. During the pandemic, the federal government expanded coverage to meet the immediate crisis. This new proposal seeks to bring eligibility back to where it was before.

Work requirements are modest. Recipients would need to work, attend school, or volunteer for an average of 20 hours per week. Individuals who are disabled or otherwise unable to work would be exempt. This is not an attack on the poor. It is an attempt to encourage workforce participation and restore a sense of purpose and dignity to able-bodied adults.

In fact, expanding the labor force in this way may help offset concerns about labor shortages and reduce dependency on illegal immigration.

From a biblical perspective, this aligns with the creation mandate to be fruitful, multiply, and steward the earth. Work is not a punishment—it is a calling.

2. SNAP Benefit Changes

The main change to SNAP is the implementation of work requirements similar to those proposed for Medicaid. These would now apply up to age 64 and would only be available to U.S. citizens and lawful residents.

This is not a gutting of the program. It is a recalibration that still provides support to those in genuine need while encouraging contribution and accountability from those who can work.

3. Clean Energy Tax Credit Cuts

Eliminating tax credits for clean energy is expected to result in layoffs and reduced investment in green technologies. That is unfortunate for those directly affected, but it does not justify the government continuing to borrow money to prop up these industries indefinitely.

Every major technological advance has displaced workers in older industries. No one today laments the end of elevator operator jobs. We can acknowledge the pain of job transitions while recognizing the broader economic benefits.

People will still buy electric vehicles and invest in clean energy where it makes financial sense. But the government should not artificially prop up demand at the cost of long-term fiscal health.

4. Healthcare Access and Costs

Projections suggest that 12 million people could lose Medicaid coverage due to the citizenship and work requirements. There are also concerns that premiums for ACA plans will increase as subsidies expire.

While these outcomes are possible, much of this is speculative. Rising healthcare costs are already a well-documented trend, and these changes are unlikely to dramatically shift that trajectory.

Some have argued that other policy efforts, like those proposed by Robert F. Kennedy Jr., may do more to control long-term healthcare costs than any provision in this bill.

What About the Wealth Gap?

The final ethical question is this: will this bill help the wealthy get wealthier while leaving everyone else behind?

We will explore that topic in more detail next week.

 

Final Thoughts

Ethically, this bill is a mixed bag.

✅ It keeps promises.
✅ It encourages work.
❌ It adds to the national debt.
❌ It favors some taxpayers over others.

As Christians, we believe policy should reflect stewardship and dignity, not just political ideology or short-term economic wins.

Let’s keep asking hard questions, even when the answers are uncomfortable.

 

Next Steps

 

 

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