One Big Beautiful Bill

Donald Trump's new tax proposal, often called the "One Big Beautiful Bill," includes several business-related advantages to incentivize domestic production and reduce tax burdens on U.S. companies.

Business-Related Tax Advantages

1. Corporate Tax Rate Cut

• Proposed a 15% corporate tax rate for businesses that manufacture in the U.S.

• Intended to boost domestic production and make U.S.-based operations more competitive globally.

2. 100% Bonus Depreciation Extension

• Maintains or reinstates full expensing of capital investments (e.g., equipment, machinery).

• Allows businesses to deduct the full cost of qualified assets in the year purchased.

3. Interest Deduction for Auto Loans

• Introduces a new interest deduction for auto loans, particularly on vehicles assembled in the U.S.—a benefit for auto dealers and manufacturers alike.

4. Incentives for U.S. Manufacturing

• Prioritizes tax relief and regulatory advantages for companies that onshore operations or expand domestic production lines.

• May include new or expanded tax credits for investment in U.S. factories or equipment.

5. Simplification for Small Businesses

• Proposals under review to streamline tax filing for sole proprietors and small pass-through entities (like S corps and LLCs).

• Potential increase in the Section 199A Qualified Business Income Deduction cap.

6. Gig Economy & Freelancer Relief

• Potential expansion of deductions and simplified expense tracking for independent contractors and gig workers.

• Aimed at reducing compliance costs and expanding eligibility for small business credits.

Proposed Changes to the SALT Deduction Cap

The new proposal includes a significant revision to the State and Local Tax (SALT) deduction cap:

• Increase to $30,000: The bill proposes raising the SALT deduction cap from $10,000 to $30,000 for taxpayers earning up to $400k annually.

• Phase-Out for Higher Incomes: For those earning above $400,000, the increased cap would gradually phase down by 20% of the amount exceeding the threshold, but it would not drop below the original $10,000 cap.

• Political Dynamics

This proposal has sparked debate among lawmakers:

• Blue-State Republicans' Push for Higher Cap: Representatives from high-tax states like New York and California argue that the proposed $30,000 cap is insufficient. Some advocate for a cap as high as $62,000 for individuals, effectively doubling for joint filers.

• Fiscal Conservatives' Concerns: Some conservative lawmakers are wary of the potential revenue loss from increasing the SALT cap, especially given the bill's projected $4.9 trillion cost over a decade. Thomson Reuters Tax

• Next Steps

The bill is currently being negotiated in Congress. House Speaker Mike Johnson has indicated that "everything is on the table," suggesting adjustments to the SALT cap could occur as lawmakers seek a consensus.