A cheat sheet for the big GOP tax bill
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and have a chance to walk away with a $75 gift card. Let's all read the thousand-plus pages of the evolving tax and spending bill in Congress, but until you do, we'll have some cheat sheets. I'm David Brancaccio in Los Angeles. The Senate is working through the massive tax and spending bill. The House has passed its version, but the two plans have to be reconciled. Republicans are pushing to do this without the support of Democrats, a fraught process that requires nearly all Republicans...

Hey, David.

Fundamentally, when you step away from all these details, the reason for this legislation is many people want to keep the 2017 tax cuts from expiring, which would raise taxes on nearly everybody if it were to expire. Now, in the legislation on the table now, are there any other changes to the tax rates themselves?

The rates would stay mostly the same as the 2017 law, but this whole thing about extending the tax cuts actually gets into an interesting debate about those 2017 tax cuts. You'll hear that everybody got a tax cuts and that lower income people got bigger tax cuts than higher income people. That's what some people have as their narrative. But you'll also hear from others that most of the benefits of the tax cuts went to wealthier Americans. And

Both of those narratives are kind of true. Here's Adam Michel, who's director of tax policy studies at the Libertarian Cato Institute. Some of the larger tax cuts will go to the higher income Americans, and that's driven by the fact that higher income Americans pay the lion's share of income taxes. Lots of lower income Americans end up not owing federal taxes anyway, so a tax rate cut or an extension of one may not feel like much.

All right. So a lot of people also focused on the standard deduction where you don't have to itemize, you just lop it off. And the child tax credit. Give us some more details on changes there. Right. The standard deduction, which, as you mentioned, most people do take rather than itemize, would become permanent at the level it is now, plus go up by $1,000 to $2,000 a year, depending on your filing status, until 2028.

The child tax credit increases from $2,000 to $2,500, but it's not a refundable tax credit, which means that if you're low income and you don't end up owing taxes, you just don't get that much out of it. According to a study from Columbia University, that leaves one in four kids out of the benefit. Now, there are also some Trump campaign trail promises that made it into the bill.

Will McBride is chief economist at the Tax Foundation. There's a proposal for exempting tips and overtime. There's a new deduction for auto loan interest and a larger standard deduction for seniors. And we'll see if those provisions survive in the Senate.

All right. Now, on the other side of the accounting ledger, reducing taxes means producing revenues that flow into the government. The Congressional Budget Office says there's close to $4 trillion in tax cuts in this bill. What is the plan to compensate for this?

At this point, it looks like most of the offsets come from changing or reducing services like SNAP and Medicaid, although the proposals coming out of the Senate are looking a little bit less severe in terms of cuts than those coming out of the House. Chris Cox is director of federal tax policy at the Center on Budget and Policy Priorities. The bill overall takes food assistance and health care coverage away from people with low and middle incomes.

And that is extremely damaging. Even with the cuts the GOP has in mind, the House version of this legislation as it stands would still add $2.4 trillion to the deficit over 10 years, with another half trillion dollars on top of that just to pay interest on the debt. Marketplace's senior Washington correspondent, Kimberly Adams. Thank you. You're welcome.

A cautious time for the U.S. economy is not stopping video gamers. In the first four days since launch, they shelled out $450 each for 3.5 million units of the new Switch 2 game consoles.

Even with that eye-watering price tag, William McKeon White, an analyst with Forrester, expects the Switch 2's momentum to hold through this year's holiday shopping season. I'm not sure.

I can understand it because this is the math I've been doing myself in my own head, which is, do I believe that this price of this console will ever go down? After past console releases, gamers could hold out for discounts a year or two after launch. But Nintendo has signaled it could raise the price of the Switch 2, depending on Trump trade policy.

That gamers are willing to invest in this new console in spite of, or maybe because of, economic uncertainty is a boon for other video game companies, says analyst Daniel Ahmad with Nico Partners. What the Switch 2 represents right now is a sort of resurgence in engagement. Ahmad says the gaming economy operates in cycles, where hyped-up console launches can energize customers and boost game sales.

Something the sector needs badly as it regroups after its pandemic boom fizzled out. I'm Savannah Peters for Marketplace. We all know that owning a small business means you wear many hats, but sometimes you really need an extra pair of hands. Upwork is how good companies find great and trusted freelance talent with more than two decades of experience with the simple and ambitious goal of pioneering a better way of working.

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After senior officials from the U.S. and China agreed on a framework to get trade relations back on track earlier this week, President Trump said two things, that it was a done deal, but that both he and China's president would have to approve. The indication from Beijing today is positive. The quote from a spokesperson for China's foreign ministry is, now that a consensus has been reached, both sides should abide by it. Details of the negotiation have yet to be revealed.

Shipping got really expensive in the last two weeks. Among the many effects of import taxes levied paused then last night a warning from President Trump that world capitals would soon start getting letters from the U.S. imposing tariff levels by country. This if these trade deals aren't reached ASAP. Despite tariffs, inflation remains tame both at the consumer level and today at the wholesale level. Diane Swonk is chief economist at the audit tax and advisory firm KPMG.

Some of that's because we saw a huge surge in inventories and many of those most at risk of tariffs did heavy discounting ahead of having to pay for tariffs. That said, in the PPI report, we did see that wholesalers, those in the middle, caught in the middle, are paying the most in terms of the squeeze in their profit margins due to tariffs.

Those are people basically storing a lot of these tariffed goods in inventory. And they're right now having to bear the brunt of the burden of tariffs. And did you see the cost of shipping across the ocean? There's a spike there. That's due to tariff distortions, wouldn't you say? Exactly. What we saw was in the days of June 2nd and June 3rd, we had the largest two-day increase in shipping costs across.

on record, went up over 40% in those two days. And that's very reminiscent of the pandemic. And there's a scramble on to get goods into the country before the most prohibitive tariffs on China are reinstated. That means ships aren't where they were supposed to be. And all those shipping costs, particularly between Shanghai and New York, Shanghai and

Los Angeles, those went up the most, over 50 percent in those two days alone. This really is a stunning surge, and those will add to the costs associated with tariffs. All right. Diane Swong, chief economist at KPMG. I'm David Brancaccio, Marketplace Morning Report from APM American Public Media. Hey, David Brancaccio here. Over the last few months, you may have heard me talk about the home that my family lost in the California wildfires this year.

Well, I recently chatted about rebuilding our Altadena, California cottage with the team over at This Old House Radio Hour, a radio program and a podcast from American Public Media. So for a tale of new beginnings or if you need any tips for your own home improvement projects, this episode has you covered. You can find episodes of This Old House Radio Hour wherever you get your podcasts.