Big Beautiful Bill, 7 Tax Cuts That Benefit the Wealthy 2026
Here’s the truth: the Big Beautiful Bill delivers $4.5 trillion in tax cuts over the next decade, and most of it flows straight to wealthy Americans.
Over the next decade, the Big Beautiful Bill will cut taxes for the richest 10 percent of Americans by more than $14,700 per year per household and cut taxes for the richest 1 percent of Americans by more than $50,000 per year, according to the Congressional Budget Office.
Meanwhile, families making under $50,000 get an average tax cut of $250—less than a dollar a day.
What You Need to Know Right Now
The One Big Beautiful Bill Act became law on July 4, 2025. It made permanent most provisions from the 2017 Tax Cuts and Jobs Act, which were set to expire at the end of 2025.
The bill contains tax cuts that technically benefit everyone. But the structure heavily favors high earners, business owners, and wealthy heirs.
Bottom line: The richest 1% of Americans would receive a total of $121 billion in net tax cuts in 2026, while the middle 20% of taxpayers would receive less than half that much, $56 billion in tax cuts.
What You Came to Know
1. Top Marginal Income Tax Rate Stays at 37%
The Big Beautiful Bill reduced the top marginal income tax rate from 39.6 percent to 37 percent. This provision can be expected to cost about $340 billion through 2034.
The 37% top rate now continues indefinitely, applying to income above $626,350 for single filers and $751,600 for married couples filing jointly.
For someone earning $1 million, that 2.6 percentage point difference equals $9,360 in annual tax savings on their top bracket income alone.
2. Estate Tax Exemption Jumps to $15 Million
This is the biggest win for the ultra-wealthy.
The federal estate tax exemption will increase to a new, “permanent” $15 million exemption as of January 1, 2026. For married couples, that’s $30 million they can pass tax-free to heirs.
In 2023, only the richest 4,000 estates owed any estate tax at all, and the federal government collected $24 billion that otherwise would have flowed to the heirs and heiresses of those estates.
The increase from the pre-2017 level of $5 million to $15 million is expected to cost $212 billion through 2034.
3. Pass-Through Business Deduction Made Permanent
Owners of LLCs, S corporations, partnerships, and sole proprietorships get to deduct 20% of their business income.
Owners of pass-through entities will continue to enjoy the 20% pass-through deduction, which Congress has now made permanent.
This deduction phases out at higher income levels, but wealthy business owners with good accountants can structure their income to maximize the benefit.
4. Capital Gains Tax Breaks Expanded
The Big Beautiful Bill expands rich investors’ ability to earn money tax-free through two key provisions:
Opportunity Zones: This provision eliminates taxes on income from investments in specified “opportunity zones” that are held for at least 10 years. The reauthorization costs $41 billion.
Qualified Small Business Stock: The Big Beautiful Bill increases the amount that can be exempted from tax under the Qualified Small Business Stock exemption by 50 percent, at a cost of $17 billion.
The previous cap of $10 million has been raised to $15 million for companies with assets up to $75 million.
💡 Pro Tip
The QSBS exemption is one of the most powerful tax breaks in the code if you’re an early investor in startups. You can now exclude up to $15 million in capital gains completely tax-free if you hold the stock for five years. That’s a $3.6 million tax savings at the 24% capital gains rate—more than most Americans earn in a lifetime.
5. Bonus Depreciation Stays at 100%
Bonus depreciation allows businesses to immediately deduct 100% of the cost of qualifying assets—such as machinery, vehicles, computers and equipment—instead of depreciating them over several years.
Originally temporary, this provision is now permanent.
A private jet used for business? You can write off the entire cost immediately. Same for luxury vehicles, high-end equipment, and commercial real estate improvements.
Large businesses benefit most, though small businesses also gain from this provision.
6. State and Local Tax Deduction Cap Raised
The original 2017 law capped state and local tax (SALT) deductions at $10,000. This primarily hit wealthy taxpayers in high-tax states like California, New York, and New Jersey.
The increase in the cap on the deductible amount of state and local taxes from $10,000 to $40,000 expires after 2029.
This temporary increase through 2029 benefits high earners who itemize deductions and live in states with high property and income taxes.
7. Tax-Free Interest on Car Loans
This one’s narrower but significant for banks and wealthy lenders.
A new provision, Internal Revenue Code Section 139L, allows eligible lenders to exclude 25% of interest income from federal taxable income on qualifying passenger vehicle loans.
Only U.S. banks and savings associations benefit from this provision.
What You Must Know
The Comparison Is Stark
While people earning $40,000 a year will see an average tax decrease of only $393, worth a few weeks of groceries, people making over $1 million a year will see their taxes go down by $97,000 in 2027.
Even more striking: Foreign investors who own shares in U.S. companies would enjoy $22 billion in tax cuts compared to just $1 billion for the bottom 20% of Americans.
The bill’s supporters argue these cuts will boost economic growth. But the London School of Economics reviewed every supply-side tax cut implemented in all 18 OECD nations over 50 years and found “economic performance, as measured by real GDP growth per capita and unemployment rate, is not affected by tax cuts for the rich”.
“Permanent” Doesn’t Mean Forever
Congress can change tax law anytime. “Permanent” just means there’s no automatic sunset date like the 2017 law had.
Future administrations could reverse these provisions, though undoing tax cuts is politically difficult.
What to Do Next
If You’re in the Top 10%
Review estate planning – The $15 million exemption creates new opportunities for wealth transfer
Maximize business deductions – The 20% pass-through deduction and bonus depreciation are powerful tools
Consider QSBS investments – Startup investments held five years can generate $15 million in tax-free gains
If You’re Everyone Else
Don’t expect miracles – Your tax cut will be modest compared to high earners
Plan for benefit cuts – Program reductions may offset any tax savings you receive
Stay informed – Tax laws change, and future administrations may reverse these provisions
FAQs About Big Beautiful Bill Tax Cuts for the Wealthy
Q: How much do rich people save under the Big Beautiful Bill?
The richest 1% receive an average tax cut of almost $65,000 in 2026. The top 10% get an average of $14,700 per year.
Q: What’s the biggest tax break for wealthy individuals?
The estate tax exemption increase to $15 million per person ($30 million for couples) is the largest, costing $212 billion over 10 years and benefiting only the wealthiest 4,000 estates.
Q: Do middle-class families benefit from the Big Beautiful Bill?
Yes, but minimally. The middle 20% of income earners receive about $1,500 in annual tax cuts, compared to $50,000+ for the richest 1%.
Q: Is the 20% business deduction only for the wealthy?
No, but wealthy business owners benefit most because the deduction applies to pass-through income, which is more common among high earners with LLCs, S corporations, and partnerships.
Q: Can I use the QSBS exemption?
Only if you invest in qualified small business stock and hold it for at least five years. You can now exclude up to $15 million in capital gains from this stock completely tax-free.
Q: Will these tax cuts expire?
Most provisions are now permanent with no sunset date. However, some like the SALT cap increase expire in 2029, and Congress could always change the law.
Q: Where can I find official information about these tax provisions?
The IRS maintains comprehensive guidance at https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions with details on all tax changes.
Disclaimer
This article provides general information about tax provisions in the Big Beautiful Bill for educational purposes only. It does not constitute tax or legal advice. Tax benefits vary significantly based on individual income, business structure, investment portfolio, and state of residence. AllAboutLawyer.com doesn’t provide tax services or personalized financial planning. For specific guidance on how the Big Beautiful Bill’s tax cuts affect your situation, consult a qualified tax professional or CPA.
For detailed distributional analysis of who benefits from the Big Beautiful Bill’s tax provisions, review the Congressional Budget Office’s official reports at https://www.cbo.gov.
Stay informed, stay protected. — AllAboutLawyer.com
This is general tax information, not legal or tax advice. Consult a qualified tax professional for your situation.
Last Updated: January 28, 2026 — We keep this current with the latest legal developments
About the Author
Sarah Klein, JD, is a former consumer rights attorney who spent years helping clients with issues like unfair billing, product disputes, and debt collection practices. At All About Lawyer, she simplifies consumer protection laws so readers can defend their rights and resolve problems with confidence.
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