Trump’s win on domestic agenda makes winners of some Minnesotans, losers of others

WASHINGTON – President Donald Trump, who has tried with limited success to make huge changes in federal policy through executive power, scored a huge victory when Congress approved a massive budget bill that will speed his domestic agenda.

The legislation would roll back policies implemented by former President Joe Biden aimed at fighting climate change and expanding health care coverage for low and middle-income Americans. But it would create winners, too, especially among the state’s corporations and wealthy taxpayers.

Here’s a breakdown of some Minnesotans who would gain, or lose, under the One Big Beautiful Bill Act:

The winners

– The legislation would make permanent trillions of dollars in corporate tax cuts enacted in 2017 during Trump’s first term and expand other tax breaks for businesses. The corporate tax rate would be permanently lowered to 21% from the 35% big businesses had to pay on their profits before Trump implemented his tax cuts during his first term. Those and other business tax breaks, including deductions for new machinery, equipment, and research and development that were slated to expire at the end of the year are now permanent.

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– Because Trump’s tax breaks are now permanent, wealthy Minnesotans, households earning $220,000 or more  a year, will continue to benefit from the biggest tax break. The Internal Revenue Service says at least 400,000 Minnesota households reported adjusted gross incomes of $220,000 or more in 2022.

– Minnesotans who pay a lot in state income taxes and property taxes will benefit because the bill raised the cap on state and local tax (SALT) deductions from $10,000 to $40,000. The smaller cap was placed on this deduction when Trump’s tax cuts went into effect in 2017. But House Republicans in swing districts in “blue” states with high income and property taxes sought the change – and won. At least temporarily. Unlike most of the other tax breaks, which are permanent, this one will expire in five years.

– Waitresses and waiters will also benefit – temporarily – from an end to some federal taxation on tips. But that deduction is capped at $25,000 per year and tip earners will still be required to pay Social Security taxes, as well as state and local income tax, on those earnings. Also, this tax break expires after three years.

– The state’s farmers will benefit from higher crop subsidies and more generous crop insurance, as well as better dairy margin prices, increased price protections for beet and cane sugar producers and expanded livestock loss insurance.

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– Some seniors will benefit from a new $6,000 deduction for those who are 65 or older. However, the deduction will phase out for individuals earning more than $75,000 a year and completely disappear for single filers with earnings above $175,000. Like some of the other new tax breaks, this deduction will end in three years – after Trump’s current term in office.

– Some new car buyers will also benefit from the bill’s provision that allows a deduction of up to $10,000 a year in interest paid on qualifying auto loans. But this deduction, which will end after three years, is only applicable to new cars assembled in the United States – a limitation that manufacturers say would exclude many popular imports.

– Minnesota’s defense contractors are also winners as the budget act boosts defense spending by $150 billion, with much of the funding going to new weapons systems made by major contractors.

The losers

– The state’s Medicaid recipients would be required, beginning in December of 2026, to meet new requirements that they work, study or volunteer at least 80 hours a month. Most Medicaid recipients already work, but the red tape associated with this requirement, and other new reporting requirements, is expected to result in the end of coverage for millions of individuals who qualify for this joint federal-state program for low-income people, known as Medicaid Assistance in Minnesota.

– Hospitals and health clinics, especially those in rural areas, that heavily depend on Medicaid patients would also be losers.

– The approximately 90,000 Minnesotans who purchase their health care through MNsure and are helped by Biden’s expansion of Affordable Care Act subsidies would also lose that help as the Trump budget bill ends those subsidies, effective at the end of this year.

– Low-income families and individuals who are dependent on the Supplemental Nutrition Assistance Program (SNAP), the official name for food stamps, would also be adversely affected. Beneficiaries will now be subject to work requirements until they are 65 years old, and starting in 2028, states will be required to pay a portion of food benefit costs, which are now fully paid by the federal government. States will also have the money the federal government pays them to run the program slashed in half.

According to a Yale Budget Lab analysis, cuts to Medicaid and food stamps, both of which benefit low-income Americans, will cost the bottom 20% of taxpayers $560 a year.

– The “big beautiful” act would also take away benefits and relief from current student loan borrowers and college-bound families. The new law will phase out most current income-driven student loan repayment plans by July 2026. New borrowers who take out any federal student loans starting in July 2026 would have only two repayment plan options: a Standard plan on a 10-to-25-year term, or the RAP plan, which requires a 30-year repayment period before borrowers qualify for student loan forgiveness

– Homeowners who want to convert their homes to solar energy and make use of energy-efficient technology will lose their Biden-era tax credits. So would owners of certain electric vehicles, who are now eligible for a $7,500 tax credit. Owners of electric cars will also suffer from the end of Biden’s incentives to establish new electric vehicle charging stations across the nation.

– Minnesota’s green energy industry would also take a hit with the end of Biden tax credits aimed at fighting climate change. Those green investments have brought Minnesota about $1 billion.

– The nation’s immigrants – both undocumented and legal residents – will perhaps feel the biggest impact from the Trump budget. Access to some health benefits will be limited for green card holders, who will also face new taxes on money they send to family overseas. The budget will greatly expand Trump administration deportation efforts by boosting spending on border security by $171 billion, with $45 billion earmarked for new detention centers and $47 billion for a border wall Trump once insisted would be paid for by Mexico. Another $3.5 billion is set aside to reimburse states for immigration enforcement and cooperation.

– Car buyers, home purchasers and other consumers will also be hurt by the likelihood of higher interest rates because the budget act has raised the nation’s debt ceiling by $5 trillion and the national debt by $3 trillion. Businesses seeking to raise capital will also be affected because the increase in the national debt will force the United States to pay higher interest on Treasury bonds, notes and bills, resulting in higher interest rates for consumer and business loans.

Editor’s note: This article was written by Ana Radelat, MinnPost’s Washington, D.C., correspondent. It is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.

MinnPost is a nonprofit, nonpartisan media organization whose mission is to provide high-quality journalism for people who care about Minnesota.