What the business world has to like (and not) in Senate version of Trump's 'big beautiful bill'
The business community has some clear wins in a Senate version of President Trump's "Big Beautiful Bill" released Monday, but it isn't getting everything it wants.
The Senate's Finance Committee released its 549-page blueprint this week that contains significant changes from what the House passed in May, especially on taxes, Medicare funding and clean energy.
The changes are still being digested by the business community but one proposal is already being embraced: a Senate-side push to make corporate tax deductions permanent for things like interest payments and new capital investments.
One idea that may not be quite so popular is the survival of an idea for a so-called "revenge tax" that would allow the government to levy new duties on foreign nations and their businesses.
That idea was introduced in the House version and sparked fears of reduced foreign investment. The version released Monday pares back the tax but doesn't eliminate it entirely, as corporate lobbyists had asked.
Specific industries also have plenty at stake from changes made by the Senate.
Businesses that work in clean energy will have more time to adjust to the phase-out of Biden-era credits. Restaurants and gig economy companies have more limited tax breaks for tips and overtime in the Senate bill. Health care providers will also have to adjust to even steeper cuts to Medicaid's provider tax structure — perhaps the most surprising and significant overall change in the Senate version.
What the Senate version of the bill doesn't appear to have — as Elon Musk and others had pushed for — is a significant change in the final price tag. Both versions are expected to add trillions to dollars to the debt.
The Senate version also raises the debt ceiling by $5 trillion, compared with $4 trillion in the House version.
The bill does have one clear cost saving measure with a slashing of the annual deduction for individual State and Local Taxes (SALT) from $40,000 to $10,000.
But that provision is even described in the official summary of the bill as "the subject of continuing negotiations," with defenders of the deduction pledging to restore the full credit forthwith.
The Senate version earned a quick flurry of Republican pledges — from fiscal hawks to defenders of those SALT deductions to those who object to the Medicaid cuts — to vote no if the final version isn't changed to their liking.
"We're not seriously addressing our long-term deficit and debt," Senator Ron Johnson of Wisconsin told reporters soon after the unveiling as he reiterated that he remains a no.
This latest release comes only about two weeks ahead of Republicans' self-imposed deadline to get the bill to the president's desk by July 4.
The Senate is aiming to pass the bill by next weekend, Ed Mills of Raymond James pointed out in a note, "however, we continue to view the July 4 target as ambitious" — suggesting that SALT and Medicaid provisions in particular could be under intense debate in the days ahead.
Here is a closer look at some of the major business world changes being proposed by the Senate:
A key focus for business owners are a series of tax deductions that will reinstate credits for corporations around things like the depreciation of property, capital investments, new factory construction, interest expenses, and research and development costs.
These provisions were present in the House version but only temporarily. Permanency was a key Senate priority once they took over even as it is expected to increase the price tag.
The bill "powers the economy by permanently extending critical pro-growth provisions and introduces new incentives for domestic investment, providing certainty for American job creators to spur domestic economic activity and invest in their workers," offered Senate Finance Committee Chairman Mike Crapo as he unveiled these provisions.
The Senate version also enhances credits for Opportunity Zones, which provide tax relief in rural and distressed communities.
The bill also includes Trump's campaign promises of no taxes on tips and overtime but in a more limited form.
Employee will have annual deductions of up to $25,000 for tips and overtime — in contrast to the House's approach of 100% deductibility under certain income limits.
Also present in the Senate blueprint is a rollback of clean energy credits for things like solar panels and electric vehicles.
The changes in the Senate would make that phaseout slower — zeroing out some key credits by 2028 — but with a bottom line that Republicans across the spectrum are united in eliminating these benefits entirely.
Amy Hanauer, the executive director of the left-leaning Institute on Taxation and Economic Policy, reacted to the released proposal by saying "the emerging clean energy economy will be curtailed and for what?"
"Our communities will be worse off as a result of this legislation,' she added.
On the fossil fuel side, the Senate bill continues to include changes to make permitting less laborious, open up new lease sales, and reverse a fee on excess methane emissions.
The Senate bill also includes a controversial plan to limit the ability of states to regulate artificial intelligence.
The Senate's provisions are less airtight (stopping short of the outright ban proposed by the House) but are expected to remain a point of contention and also potentially an issue for the Senate parliamentarian given the Senate's complex reconciliation rules.
Other changes in the bill appear to have cut against the business interests at least slightly.
The Senate bill makes permanent the so-called pass-through deduction — formally called a 199A deduction for small businesses — but at the current rate of 20%.
The House version also had permanency but at a higher rate of 23%.
Meanwhile a clear focus of business lobbyist ire has remained in the bill but in a slightly diminished form: this so-called "revenge tax."
That is an idea that would allow a president to punish companies and countries if they adhere to foreign laws that policymakers find objectionable. In Trump's case things like the digital services taxes the often hit tech companies overseas.
The Senate version, in a nod to the flurry of concerns, set a maximum rate of 15% and delayed implementation until 2027 but kept the concept intact.
In addition to that tax, the SALT and Medicaid changes are likely to be most in focus in the days and weeks ahead.
Tobin Marcus of Wolfe Research noted Tuesday morning that "SALT changes underscore the reality that this is another step forward in negotiations, not the final answer."
He added "we still view late July as the real deadline."
Ben Werschkul is a Washington correspondent for Yahoo Finance.
Click here for political news related to business and money policies that will shape tomorrow's stock prices
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New York Times
11 minutes ago
- New York Times
California Bill Would Bar Officers From Wearing Masks
A proposed law in California would bar law enforcement officials from wearing masks while interacting with the public. The bill was introduced as a series of immigration raids across the country — carried out in some instances by masked officers — have touched off intense protests in California and elsewhere across the nation. The proposed law, announced by two Democratic lawmakers on Monday, would apply to local, state and federal law enforcement officials. It would make it a misdemeanor for them to wear masks while on duty, except in certain circumstances. The bill would also 'state the intent of the Legislature' to pass separate legislation requiring officers to display their name and badge number on their uniforms. 'We're seeing the rise of secret police — masked, no identifying info, even wearing army fatigues — grabbing and disappearing people,' State Senator Scott Wiener, one of the lawmakers who proposed the bill, wrote in a social media post announcing the legislation. 'It's antithetical to democracy and harms communities,' added Mr. Wiener, whose district includes San Francisco. The bill, known as the 'No Secret Police Act,' would provide an exemption for SWAT members and officers who use masks to reduce harm, including to prevent disease transmission or smoke inhalation. But the proposed law is still in the early stages of the approval process, and it's unclear if, or how, it could be applied to federal officers. Want all of The Times? Subscribe.
Washington Post
15 minutes ago
- Washington Post
Ketanji Brown Jackson reports $2 million in income last year for her memoir, 'Lovely One'
WASHINGTON — Supreme Court Justice Ketanji Brown Jackson received more than $2 million last year for her best-selling memoir, 'Lovely One,' according to her annual financial disclosure, released Tuesday. Jackson's outside income exceeded that of her court colleagues combined, the reports showed. Justice Neil Gorsuch reported $250,000 for the book he published last year, while Justice Sonia Sotomayor said she received $134,000 in royalties and an advance for a new book due out next year. The annual reports paint a partial picture of the justices' finances, as they are not required to reveal the value of their homes or, for those who are married, their spouses' salary. Their investments also are reported in ranges. The justices earn a salary of $303,600 for their work on the court, except for Chief Justice John Roberts , who is paid $317,500. 'Lovely One' was published by Random House in September and briefly topped the New York Times bestseller list. Jackson, the first Black woman on the nation's highest court, signed the contract soon after taking her seat in 2022 and last year reported receiving a nearly $900,000 advance. She undertook an extensive speaking tour to promote the book and reported 15 paid trips across the country last summer and fall. The nearly $3 million she has received so far rivals the contract Sotomayor signed for her memoir, 'My Beloved World,' first published in 2013. Sotomayor, who also has written several children's books, is writing a new one called 'Just Shine! How to Be a Better You' inspired by her late mother, People magazine has reported. Gorsuch's latest book, 'Over Ruled: The Human Toll of Too Much Law,' was published in August by Harper, an imprint of HarperCollins Publishers. Justices Amy Coney Barrett and Brett Kavanaugh also have book deals. Barrett, Kavanaugh and Gorsuch reported a bit more than $30,000 each for one- or two-week law school teaching gigs. Barrett and Kavanaugh taught at the University of Notre Dame's law school in South Bend, Indiana. Each has a child attending college there and Barrett was on the law school faculty before becoming a judge. Gorsuch taught in George Mason University's summer law program in Porto, Portugal. Roberts reported teaching a two-week course in Galway, Ireland in July. He said he wasn't paid until February. His compensation will be on the report that's released a year from now. The only justice whose report was not available Tuesday is Samuel Alito , who received an extension for up to 90 days, as he does most years.
TechCrunch
16 minutes ago
- TechCrunch
Intel to layoff up to 20% of Intel Foundry workers
In Brief Intel will begin a new round of layoffs next month. The semiconductor giant plans to layoff at least 15%, and up to 20%, of workers in its Intel Foundry division starting in July, according to an internal memo originally reported on by The Oregonian. Intel Foundry designs, manufactures, and packages semiconductors for external clients. It's unclear how many workers this will directly impact. Intel's total workforce was 108,900 people as of December 2024, according to the company's annual regulatory filing. TechCrunch reached out to Intel for more information. This news is not a particular shock. Since Intel's CEO Lip-Bu Tan took the helm in March, he's made multiple references that the company needed to refocus on its core business units, flatten its organization structure and return to being an engineering-first company. Rumors of these specific layoffs began swirling in April. Tan also told Intel's customers it would spin off its noncore units at the company's Intel Vision conference in March. Intel previously laid off 15% of its staff, around 15,000 employees, last August.
