The House Ways and Means Committee has voted to advance a sweeping tax reform bill that aims to permanently extend several provisions of the 2017 Tax Cuts and Jobs Act, along with other tax priorities for the current administration. Dubbed the One, Big, Beautiful Bill, the legislation passed along party lines with a vote of 26-19.
As previously reported by AltsWire, the bill proposes several key updates to the qualified opportunity zone program, such as a new designation window that extends through 2033, a new subcategory of “rural qualified opportunity funds,” stricter eligibility rules, and mandatory reporting, among other changes. The committee stated that the renewal of the OZ program will spur more than $100 billion in new investment over the next decade.
Additionally, the bill would make the Section 199A qualified business income (QBI) deduction permanent at 23%. According to the House Ways and Means Committee, this change would generate $750 billion in economic growth, particularly among small businesses. Notably, business development companies, or BDCs, would also be able to utilize this deduction. The individual tax rate deductions, ranging from 10% to 37%, would also be made permanent.
One of the most contested portions of the bill revolves around the state and local tax, or SALT, reduction cap. The current draft includes a $30,000 SALT deduction cap for individuals earning under $400,000, which members of the SALT Caucus have criticized as insufficient. Further revisions are expected as House leadership continues negotiations.
While Republicans have promoted the bill as a pro-growth, pro-worker measure, Democrats have uniformly opposed it, arguing that the proposal disproportionately benefits wealthy households and corporations while potentially risking long-term fiscal health. According to the Joint Committee on Taxation, the bill would add $3.7 trillion to the deficit through 2034 and provide a reduction in taxes of $384.6 billion for the top-earning fifth of Americans, while only providing a $3.6 billion reduction for America’s lowest-earning fifth. Democrats proposed several amendments to the bill, but none were accepted.
Next, the bill will head to the House Budget Committee. Reconciliation in the Senate will likely follow in the summer, if passed.
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