House Republicans on the Ways and Means Committee have introduced a sweeping tax proposal dubbed the One, Big, Beautiful Bill – a title that echoes the president’s own description of the legislation. The bill seeks to restore and expand key provisions of the 2017 Tax Cuts and Jobs Act and includes reforms with direct implications for the alternative investment industry.
The proposal has been positioned by Republicans as a cornerstone of the Trump administration’s pro-growth economic agenda. “This bill delivers on President Trump’s priorities to provide historic tax relief to working families, small businesses, and American manufacturers,” said Ways and Means Committee Chairman Jason Smith, R-Mo., in a statement. “It is bold, pro-America, and pro-worker.”
Among the most relevant provisions for the alternative investments sector:
- Opportunity zone overhaul: A second round of opportunity zone designations would begin in 2027 with tighter eligibility criteria and mandatory rural inclusion. At least 33% of new zones would be located in rural areas. Investments in rural qualified opportunity funds would receive a 30% basis step-up after five years, compared with 10% for standard zones. The proposal also eliminates the use of contiguous tracts and requires enhanced transparency reporting.
- Expanded qualified business income deduction: The bill would permanently increase the deduction for qualified business income to 23%, up from 20%, starting in 2026. The deduction would newly apply to income from business development companies, with smoother phase-in thresholds to ease tax cliffs for high earners.
- Increased estate and gift tax exemptions: The federal exemption would rise to $15 million for individuals and $30 million for married couples, indexed for inflation starting in 2026. The change is expected to enhance legacy planning flexibility for family offices and high-net-worth individuals.
- Immediate expensing for capital investment: The bill reinstates 100% bonus depreciation for qualifying assets placed in service through 2029, with additional support for production property and domestic research and development, or R&D. These provisions could benefit infrastructure, energy, and manufacturing-aligned fund strategies.
- Preservation of international tax provisions: The legislation retains current deduction rates for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI), maintaining favorable treatment for U.S. companies with foreign operations.
- Rollback of clean energy tax credits: The bill would repeal or phase out more than a dozen clean energy tax credits established by the Inflation Reduction Act of 2022, including those for electric vehicles, clean hydrogen, and carbon capture. “It unwinds many of the left’s costly Green New Deal policies,” Smith said.
- Reporting threshold revisions: The bill repeals the $600 Form 1099-K reporting requirement enacted under the American Rescue Plan Act of 2021, restoring the $20,000/200-transaction threshold and increasing the Form 1099-NEC threshold from $600 to $2,000.
Democrats have sharply opposed the proposal. In a statement, the Democratic National Committee accused Republicans of releasing the plan “in the dark of night” and said it would “gut Americans’ Medicaid” while delivering “hundreds of billions in tax giveaways to the ultra-wealthy and corporations.”
After committee markup, the bill will move to the House floor, where it is expected to pass along party lines. From there, it is likely to be considered under the budget reconciliation process in the Senate – a procedural tool that allows legislation affecting spending or revenue to bypass the 60-vote filibuster threshold and pass with a simple majority. Because Republicans currently hold a narrow majority in the Senate, the reconciliation route provides a viable path to enactment without Democratic support, provided GOP senators remain unified.
The White House has indicated strong support for the proposal, with Trump publicly praising the bill’s scope and branding it as a “historic tax cut for American families, workers, and small businesses.”
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