The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, marks the most sweeping changes to federal tax policy since the 2017 Tax Cuts and Jobs Act (TCJA).
A central provision of the OBBBA makes permanent the individual tax cuts originally enacted under the TCJA, preventing a potential tax increase for an estimated 62% of filers in 2026. Beyond extending TCJA measures, the law introduces additional tax relief for both individuals and businesses—including new deductions for tipped and overtime income, an expanded child tax credit and standard deduction, and permanent 100% bonus depreciation along with domestic R&D expensing.
Why it matters: These tax cuts put more money back in people’s pockets—critical relief at a time when wages still lag behind inflation and new tariffs could drive prices higher.
According to a new analysis from the Tax Foundation, a nonpartisan research group, the average American is projected to see a $3,752 federal tax cut in 2026 under the new bill. The analysis estimates these tax cuts for individuals at the state and county level across all 50 states.
To illustrate the impact of the OBBBA, the Tax Foundation estimated the average change in taxes paid per individual taxpayer under the new law, compared with prior policy, across every state and county from 2026 through 2035. Their map highlights the significant geographic variation in tax benefits—showing how outcomes under the OBBBA differ from a scenario where TCJA’s individual tax provisions expire and business taxes rise as originally scheduled in 2026.
Some of the highlights include: Residents in high-tax coastal regions will also see significant breaks, as the cap on state and local tax (SALT) deductions is increased to $40,000 (with a return to the $10,000 cap after 2029).
The biggest average tax cuts are concentrated in wealthy mountain resort communities, home to many high earners and business owners. Teton County, WY tops the list with an average tax cut of $37,373—the highest in the nation. It’s followed by Pitkin County, CO at $21,363 and Summit County, UT at $14,537.
In San Diego County, the average tax cut is -$3,564.
The Tax Foundation projects that the OBBBA will generate roughly 938,000 full-time equivalent jobs nationwide over the long run. The impact varies widely by state—from more than 132,000 jobs in California and 81,000 in Texas to just 1,700 in Vermont.
While the legislation provides tax benefits, it simultaneously reduces funding for food assistance and Medicaid programs, with most cuts taking effect in 2027-2028. These delayed social spending reductions may ultimately negate the tax advantages for lower-income households.
If you are a business owner in Southern California and have questions about how these tax changes affect you? Contact Huckabee CPA today for a complimentary consultation to discuss your specific circumstances.
