GOP Megabill touches almost every sector of the federal government. The lesser known components are:
After the House passed in the early hours of May 22nd, one big beautiful bill law (a way to fund and implement President Donald Trump’s agenda) is in a process currently being assessed by the Senate.
Aside from these well-known components of the law, some lesser known, but influential, have also been slipped into the bill, leaving little to no longer the government’s regional and federal budget territory.
Here’s what you need to know about these:
artificial intelligence
The bill will begin to integrate artificial intelligence into various sectors of the federal government, limiting the state’s ability to regulate new technologies for a decade.
The text of the bill states, “A law or regulation that regulates artificial intelligence models, systems, or automated decision systems cannot be enforced in the decade beginning on the date of this law.”
Despite several hearings on the topic over the past few years, Congress has made little legislative progress on growing issues up until now.
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The provision is popular with the tech industry chief who has previously warned of the need for regulations, and not only expresses fear that the technology can escape human control, it may not be popular, just like the senators who investigated the issue.
Additionally, the bill represents hundreds of millions of dollars to use AI in government functions, including Medicare payments, naval shipbuilding and Department of Defense audits.
The court is prohibited from enforcing light emptying
Amid the ongoing dispute with the judiciary, the bill would limit the ability to hold members of federal court administrations, particularly those relating to Trump’s massive deportation operations.
Specifically, the bill requires that the plaintiff be provided with bonds before a judge enforces the light empty order. In current federal court proceedings, this fee can be exempt depending on the nature of the case.
This requirement is retroactively imposed by the legislation and could limit judicial options to address administrative failure to comply with court orders.
HSA was supported
The law strengthens the health savings account (HSA), a federal account that allows taxpayers to save tax-free money for eligible health services by qualifying gym memberships.
The beneficiary may pay $500 a year to pay such expenses, or $1,000 to a married couple.
For example, eligible facilities cannot be “a private club owned and operated by members” and cannot provide “golf, hunting, sailing, or riding facilities.” Other materials such as videos and books relating to personal fitness are not covered by the HSA account fund under the bill.
Also, certain taxpayers are eligible to increase their contribution limit of $4,300 for a single taxpayer and $8,550 for married couples, depending on their income.
Real estate tax
The bill also extends the 2017 real estate tax cuts, allowing single-owned properties to pass tax exemptions of up to $15 million, while couple-owned properties can pass tax exemptions of up to $30 million.
This is a change that could result in less than 0.1% of real estate subject to federal real estate tax, by some estimates.
The think tank writes that the extension of the exemption will “expect the share of taxable property will remain close to 2019 (level).
Free tax filing tools have been discontinued
The law abolishes a program called “direct files,” which was enacted by President Joe Biden’s administration, which allows taxpayers to file directly.
As part of a push to end the domination of services like Turbotax and H&R blocks, this tends to charge professional services for most taxpayers’ money, but Biden Administration has created a “direct file.” I tried to save taxpayers money. It usually allows access to the same services offered by tax preparation companies at a rate, and is currently available in 25 states.
The bill requires the program to be completely abolished and terminated within 30 days of the passage of the bill.
Until we hold off a report by the Treasury Secretary on the feasibility of such programs and taxpayer sentiment, we are revealing the possibilities of new and similar services. The law suggests that up to 70% of taxpayers are eligible to use the new program for free.
“Trump Account”
The bill also adds a pilot program for the “Trump Account.” This is a type of federal trust account that offers a $1,000 bonus to parents for each child signing up for the program.
Taxpayers can donate up to $5,000 a year to their account. This allows the beneficiary to grow tax-free until the money is over 18 years old.
A withdrawal is subject to either capital gains or income tax rates, depending on the nature of the cost.
Costs such as tuition fees, initial home purchases, and small business expenses are subject to lower capital gains tax rates. All other uses of funds are subject to the normal income tax rate, including a 10% penalty for unqualified expenses.
The tobacco industry has been abolished
Another element of the law excludes the amortization of taxes that some US tobacco companies rely on.
Under current law, tobacco companies pay excise tax when they manufacture or import cigarettes into the United States. However, loopholes in the Internal Revenue Act of 1986 have historically allowed much of this excise tax to be recovered through a process known as an alternative drawback.
This law means repealing this refund. This means that many tobacco companies may face a higher sales tax burden on domestic sales than they have in decades.
Revocable tax exemptions for nonprofits “supporting terrorists”
The law allows the administration to revoke the tax-free status of nonprofit nonprofits that are considered “organizations that support terrorists.”
The 1986 Amendment to the Internal Revenue Code, §501(P), which is advertised as part of the Patriot Act, attempted to steal terrorist groups that had raised money or otherwise subsidized.
The law would alter or face revocation of tax-free status status for organizations deemed “terrorist support” for 90 days.
The provision appears to target nonprofits that are deemed to support Palestinian terrorist groups such as Hamas, as part of the administration’s efforts to combat Hamas anti-Semitism following the attack on Israel on October 7, 2023. However, no explicit standards are provided that exceed the laws laid out in the original 1986 law.
End of sales tax on firearm silencers
The Act also includes provisions to remove the requirement to pay taxes on silencer attachments under the National Firearms Act of 1934.
Currently, such attachments are designed to reduce the sound that firearms produce when fired, but are subject to a $200 excise tax. The Republican bill would completely eliminate that fee.
The move was soon celebrated by gun rights groups, who portrayed it as a victory in the second amendment. Supporters say these attachments can also reduce hearing loss caused by firearm sounds, but opponents say such attachments are primarily useful in hiding evidence of crime.
Fix: Previous versions of this article incorrectly stated the amount of firearm excise tax. The Epoch Times regrets the error.
