• Ray Dalio said on X that Moody's credit downgrade doesn't cover the risks of government money printing.
• Moody's downgraded US credit to Aa1, citing growing deficits and ballooning interest payments.
• A GOP tax bill could worsen US debts, with proposed tax breaks and increased defense spending.

Billionaire investor Ray Dalio thinks Moody's recent downgrade of the US sovereign credit rating doesn't capture the danger of the federal government simply printing cash to cover its bills.

"You should know that credit ratings understate credit risks because they only rate the risk of the government not paying its debt," Dalio, the founder of Bridgewater Associates, warned said on X. "They don't include the greater risk that the countries in debt will print money to pay their debts thus causing holders of the bonds to suffer losses from the decreased value of the money they're getting."

"For those who care about the value of their money, the risks for US government debt are greater than the rating agencies are conveying," Dalio added.

Dalio's comments came after Moody's, the international financial services company, downgraded the US credit from Aaa to Aa1 on Friday, citing growing deficits and surging interest payments. That makes Moody's the last of the three major credit agencies to bump America's credit off the highest rating. S&P Global Ratings downgraded the US back in 2011, and Fitch Ratings followed suit in 2023.

In response to the downgrade, stocks slipped on Monday while Treasury yields spiked. The 30-year bond yield jumped 4.995%, and the 10-year bond yield rose to 4.521%.

Adding to investor concerns, economists are sounding the alarm on a tax cut bill proposed by Republicans that could come to pass given the slim GOP majorities in both the House and the Senate.

The bill proposes tax breaks for the wealthiest Americans through a higher estate tax exemption, interest tax breaks for private equity, and a $150 billion boost in defense spending. It also plans to increase the child tax credit by $500 and eliminate taxes on tips and overtime pay.

Despite the bill also proposing spending cuts to Medicaid and SNAP and to hike taxes for immigrants, the Budget Lab at Yale, a nonpartisan policy research center, says that the GOP bill would worsen America's debt.

"The bill as currently proposed would substantially add to the deficit, even if accounting for possible tariff revenue," authors of the report wrote, "If we account for the likelihood that these provisions would become permanent, at the end of 30 years the debt-to-GDP ratio would be over 180%, even assuming substantial revenue from tariffs."

According to the report, Sudan and Japan are the only two countries with a debt-to-GDP ratio over 180%.

"Assuming temporary provisions expire, the bill's baseline cost of $3.4 trillion would make it the largest spending package in US history," the report added.

In a rare Sunday night vote on May 18, the GOP tax cut bill narrowly passed the House Budget Committee, which days before rejected the bill. The bill now heads to the House for a vote this week.

A spokesperson for Dalio did not immediately respond to a request for comment.

There's a pretty clear sentiment in America's corporate world these days: anxiety.

Yes, big business generally welcomes the deregulatory promise and likely lighter tax bill that comes with Donald Trump's second presidency. But the accompanying uncertainty of Trump 2.0 is also leaving corporate America slightly on edge. The president is issuing executive orders at a breakneck pace, but vague wording, court battles, and questions of legality mean the significance of these orders is unclear. Trump has promised to take big swings on tariffs and immigration, but how those swings actually manifest is in flux. Elon Musk is a similarly disruptive figure, with his DOGE staff firing federal workers and slashing funding for various programs at a head-spinning rate. Given the bum-rush first month, many corporate leaders are scrambling to gain some favor with Trump or, at the very least, avoid his ire.

In short, we're in an era of scaredy-cat capitalism. American business isn't moving boldly and swiftly — it's acting slowly and timidly, waiting for the uncertainties to shake out and trying not to call much attention to itself in the meantime.

When Trump took office in 2017, many CEOs were alarmed by his immigration and climate policies. When Trump was inaugurated in 2025, some of America's most recognizable corporate executives were seated behind him. Major companies and leaders donated millions of dollars to Trump's inauguration fund and have visited the president's Mar-a-Lago club. If companies appeared somewhat willing to strike a tone of defiance in 2017, the vibe this time around is one of compliance.

In December, ABC News, owned by Disney, agreed to pay $15 million to Trump's future presidential library in order to settle a defamation lawsuit. Meta similarly cut a deal in January to give $22 million to settle a 2021 suit. CBS's parent company, Paramount, has thus far held out on settling a lawsuit Trump filed over a "60 Minutes" segment, though some observers believe it's only a matter of time before it folds, possibly in hopes that the administration will look more kindly upon a pending acquisition by the studio Skydance. As my colleague Peter Kafka has pointed out, these Trump lawsuits are the type that typically would not get very far — but now that he's back in the White House, the risk-reward calculus is different.

"Powerful companies with enormous legal resources are deciding that they're better off making a payment — in the form of a donation — to Trump than fighting him," Kafka wrote.

In an attempt to head off Trump's anti-DEI campaign, several companies have backed away from diversity, equity, and inclusion efforts. Companies including Target, Walmart, and Meta have announced policy rollbacks. Others, such as GM, PepsiCo, and Disney, have taken a subtler approach, quietly axing DEI language and programs. The US Chamber of Commerce has pulled much of the information about its Equality of Opportunity Initiative, announced in 2020 to "help close race-based opportunity gaps," from its website.

This isn't happening in a vacuum: The right has been increasingly vocal in its opposition to DEI efforts in recent years, and Trump has put that opposition into overdrive — and in writing. He's signed executive orders seeking to root out DEI practices in the private and public sectors, including barring government contractors from engaging in them and asking federal agencies to identify corporate targets for potential lawsuits over DEI. The plan, according to Trump, is to stop "illegal DEI." It's not clear what that means, and the underlying law hasn't changed, but it still makes companies nervous and has had a chilling effect. No one wants to be the government's target — or draw the conservative internet's ire and become the next Bud Light. Agencies may be looking for low-hanging fruit to make an example out of in order to scare others off. And regardless of what the government does, negative publicity and social media campaigns are a threat in and of themselves.

Some business leaders may remember some of the vindictive nature of Trump's first term, such as the president's opposition to the AT&T-Time Warner merger, reportedly partly because of his dissatisfaction with CNN. In an interview with Bloomberg last July, Ken Chenault, the former CEO of American Express, cited it as cause for trepidation about a second Trump term. "The fear is real," he said.

Daniel Kinderman, an associate professor at the University of Delaware who studies business responses to right-wing populism, said companies may regret cozying up with Trump and being quick to bend to his will.

"What the government's doing is so radical that I think a lot of companies will be sorry that they got on the bandwagon or did not keep a greater distance," he said. "It's not reducing their risks."

On the domestic and foreign fronts, the perception of Trump as a loose cannon may give him an advantage in negotiations — acting unpredictable and volatile is a way to throw, say, China off balance. But for business, it can be challenging to navigate.

"Businesses like predictability, and that's not what they're going to get from Trump," said Alex Conant, a Republican strategist who was the communications director for Marco Rubio's 2016 campaign. "Trump is highly unpredictable, which creates a challenging business environment."

In a note on Tuesday, David Kelly, the chief global strategist at J.P. Morgan Asset Management, said that the policy uncertainty created by the Trump administration could slow economic growth, affect hiring, and stunt investment. He pointed to tariff threats, immigration crackdowns, federal workforce reductions, and federal budget uncertainties as areas where action could be cause for business hesitancy.

"The rapid pace of these moves, along with frequent reversals, court challenges and mixed signals on future policy actions, make it difficult for economists to assess their cumulative effects," he wrote. "Also important, and even harder to analyze, is the potential for policy uncertainty to delay business decisions."

If you're an automaker, for example, you're staring down the potential of steel and aluminum tariffs, separate tariffs on imports from Canada and Mexico, and reciprocal tariffs from trading partners. Plus, you're not sure what's going to happen with electric vehicle tax credits. It's hard to know where to begin or whether to make an investment at all. At a conference in February, Ford's CEO, Jim Farley, said Trump's moves had created "a lot of costs and a lot of chaos" for the industry.

In an interview with CNBC on Thursday, Walmart's chief financial officer, John David Rainey, said the retailer was "not going to be completely immune" from tariffs on imports from Mexico and Canada. Tariffs on imports from China would likely affect the company, too. He said that there was "far from certainty in the geopolitical landscape" and that Walmart hadn't calculated tariff increases into its financial expectations for the year.

Companies are tasked with laying out various scenarios of what might happen next — and reassuring their shareholders that they're prepared for whatever's ahead. Elaine Buckberg, a former chief economist at GM, has been in this situation before: the trade war with China that Trump kicked off during his first term.

"I feel like I was doing scenarios on China tariffs back and forth, basically, until COVID came and took away all the attention," she said. "I would prepare presentations the night before, and they'd be updated by the next morning."

Buckberg pointed to a 1983 paper from Ben Bernanke (who would go on to be the chair of the Federal Reserve) on investment decisions and uncertainty. "If there's this irreversible investment and there's uncertainty, you'd rather wait until the uncertainty clears up," she said. "And so that means you should expect lower business fixed investment, which hurts growth until this uncertainty resolves."

Congress and Trump will need to negotiate through at least one tax bill this year, as Trump's 2017 tax law is set to expire. Conant pointed out that this fight will be more uncertain for businesses. Congress may look to find ways to raise revenue — whether from higher taxes on certain activities or by eliminating tax credits. That could make for some winners and losers, and pit various industries against each other. "I don't think the business community is going to be as united this time as they were last, because there's going to be winners and losers," he said.

To be sure, businesses are benefiting from plenty of Trump's actions, uncertainty and all. He signed an executive order halting enforcement of the Foreign Corrupt Practices Act, which bars companies from bribing foreign government officials. The Trump administration is likely to be more hostile toward unions than the labor-friendly Biden administration and take a hands-off approach to regulation. Still, the insecurity of it all remains a challenge.

"I've been in Washington for 15 years, and this is the most chaotic time, where there's so many surprises that are happening on a weekly basis," said Nick Nigro, the founder of Atlas Public Policy, a research firm in Washington, DC. "There's too much uncertainty for meaningful decisions to be made right now."

The global Economic Policy Uncertainty Index, which tracks news coverage of economic policy uncertainty, has risen sharply since the 2024 election. The National Federation of Independent Business' optimism index ticked down in January, though it remains well above where it was during the Biden administration. The National Association of Home Builders survey that tracks sentiment among homebuilders found that confidence fell in February. The University of Michigan's consumer sentiment indexes dropped in February as people began to worry about tariffs and inflation concerns bubbled back up. As Americans contemplate the landscape, optimism remains, but reality is setting in, and it's a bit unnerving.

Across corporate America, a pervasive sense of unease is setting in. Businesses do not want to call negative attention to themselves, even on what many might consider run-of-the-mill diversity programs. They don't want to become a target of the president or of angry people of any political persuasion online. Meanwhile, they're managing an outlook where it seems like anything could happen — an executive order here, a court battle there, an immigration raid, a new tariff, an axed tax break. The feeling permeates through consumers and workers, too. If the federal government is taking a slash-and-burn approach to its workforce, what's stopping business from following suit? Many companies have been cutting their workforces. Plenty of consumers have wondered if they should stock up on stuff before tariffs take hold, and some have taken action.

Scaredy-cat capitalism doesn't mean panic mode — but it's a scenario where everyone's a little insecure about what comes next.

Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.

• Trump's 2017 tax cuts are set to expire this year, which could impact Americans' wallets.
• Trump's Tax Cuts and Jobs Act lowered individual rates and doubled the child tax credit.
• Experts shared how individual taxes, along with tax breaks for parents and EVs, could change.

President-elect Donald Trump and the incoming Republican congressional majorities could have a big impact on your taxes next year.

Many provisions from President-elect Donald Trump's 2017 Tax Cuts and Jobs Act are set to expire by the end of this year unless Congress renews the tax bill. On the campaign trail, Trump proposed extending many of the law's provisions and adding more.

"We refer to this next year as the Tax Super Bowl. It's a big one," said Mark Baran, the managing director at the financial and professional services firm CBIZ's National Tax Office in Washington, DC.

If the TCJA is extended, and Trump's new provisions — such as eliminating taxes on tips — are added, many Americans could see their individual tax rates drop, or at least stay low. Additionally, Republicans are eyeing an even bigger increase to the original child tax credit from the TCJA while Biden-era tax provisions like the electric-vehicle credit are on the chopping block.

Trump's 2017 tax package had an immediate effect on many Americans — it brought down individual tax rates for almost all filers, doubled the child tax credit to $2,000 per child from $1,000, and doubled the standard deduction that Americans could claim, among other measures. If the Tax Cuts and Jobs Act isn't extended, more than 62% of filers would face a tax increase in 2026, per an analysis from the Tax Foundation.

"President Trump is committed to lowering the tax burden on the American people who elected him in November with an overwhelming mandate to Make America Wealthy Again," Trump spokesperson Karoline Leavitt said in a statement to BI. "The Trump Administration will be dedicated to ensuring that American workers keep more of their hard earned dollars in their pockets while growing the strongest and most resilient economy the world has ever seen."

"From a planning standpoint, I would love to see the Tax Cuts and Jobs Act extended," said Brian Kearns, a CPA and the founder of the financial planning and tax consulting firm Haddam Road.

Kearns said an extension would mean easier planning and lower rates for clients. "Will it happen? I honestly have no idea."

Here are the biggest changes that could be coming.

Tax rates for most Americans will probably stay low

Baran said that taxpayers could be cautiously optimistic about an extension on the TCJA's reduced individual tax rates.

"The election has created a little more certainty. However, the challenges are still there," he said.

The table below compares tax rates and brackets under the TCJA and if the TCJA expires.

A break for high-income filers in high-tax cities and states is a big question mark

Another provision from TCJA that could save taxpayers money is the State and Local Tax deduction, known as SALT. That provision allows taxpayers in areas with high local taxes — such as prominent blue states like New York and California — to claim those taxes as a deduction.

The deduction was unlimited before the TCJA capped it at $10,000, meaning some high-income residents of those high-tax jurisdictions ended up owing more to the federal government after the law went into effect. That's drawn the ire of strange legislative bedfellows, with Democrats and Republicans in those blue states calling to roll back the cap. But there's already Republican dissent over how to tackle the cap, if at all.

Some Republicans — and Trump advisors — proposed raising the amount to $20,000, giving some relief to Americans paying a lot in local taxes. Trump himself has said he would "get SALT back."

But the cap may end up staying where it is. "It would be great if they raised it because there's a lot of people that are needing relief, but I can't tell you where that's going to head," Scott Brillhart, a partner and the director of tax at Founder's CPA, said.

Promises to wipe out taxes on tips and Social Security could be difficult to keep

The tax experts BI spoke with questioned how feasible proposals like eliminating taxes on tips, overtime, Social Security, and auto loans would be — all of which were talking points for Trump on the campaign trail. Brillhart said eliminating taxes on tips could be a "logistical nightmare for employers."

"I think it would be more complicated than the benefit it would be for a lot of this stuff," he said.

But Kearns said that the impact of reducing those taxes could be felt among a big slice of Americans.

"This matters a lot for all different segments of the population. You're younger, you're waitering or waitressing — no tax on tips, that's a big deal," Kearns said. "If you are receiving Social Security, that's a really big deal to not be paying taxes on your Social Security."

The child tax credit is another wild card

Another provision that could impact many Americans is the child tax credit. Parents could lose out on a $1,000 tax break if the TCJA expires this year. However, at least one Republican lawmaker — Sen. Josh Hawley of Missouri — is pushing a potential increase from $2,000 to $5,000. Vice-president-elect JD Vance also floated a $5,000 child tax credit on the campaign trail.

"You, of course, have to work with Congress to see how possible and viable that is," Vance told CBS's "Face the Nation."

Brillhart said that a higher child tax credit would be "very helpful" for many families and should be seriously considered.

Tax breaks for electric cars are on the chopping block

Additionally, Americans interested in going electric may want to plug in now — at least if they want some tax benefits. Brillhart said that the tax credit of up to $7,500 for electric vehicles that President Joe Biden passed in 2022 could be on the chopping block.

"If that is a deciding factor for you to be purchasing an EV, I'm not telling them to go run out and purchase something, but it's something to consider," Brillhart said.