The ‘One Big, Beautiful Bill' urgently needs a makeover to usher in Trump's Golden Age

Fox News

2 days ago

President Donald Trump is working to usher in a new Golden Age for America. But he needs Congress to do its part by ensuring that the "One Big, Beautiful Bill" isn't neutered by shortsighted compromise.
Recently, Trump gave Senate Republicans the green light to make changes to the House version of his signature legislative initiative, openly acknowledging that there is room to significantly improve on its current form.
I've been working publicly and privately to advocate for this bill since before Trump's reelection, collaborating with some of the greatest business leaders and economists in the country to ensure that we make the absolute most of this rare opportunity to set this country up for long-term economic prosperity.
We've identified several provisions that add significantly to the bill's "score" from the Congressional Budget Office (a measure of how much the legislation is projected to affect the federal budget) without offering commensurate economic benefits. Addressing these provisions would free up space to expand the bill's most impactful pro-growth elements — most significantly by creating the budget room to make the Trump tax cuts permanent.
One element of the House bill that needs to be eliminated is a provision offering full expensing for new structures. While it might sound like a good, pro-growth idea to allow companies to deduct the entire cost of a new building the year it's placed into service, in practice no public company would ever take advantage of it — because taking the deduction would slash their reported earnings, harming their stock value and investor confidence.
Even private businesses face structural hurdles, including the Corporate Alternative Minimum Tax (CAMT), income mismatches and the reality that bonus depreciation already provides ample incentive. Buildings are long-term investments. A one-year tax write-off simply isn't the deciding factor.
According to the CBO, however, this provision alone adds $148 billion to the projected cost of the "Big, Beautiful Bill." That's a huge chunk of change that crowds out other worthwhile provisions that companies would actually use to increase productivity and output.
Blue state Republicans successfully fought for the inclusion of a much more generous cap on state and local tax (SALT) deductions, which the House bill raises from $10,000 to $40,000. The increased cap means that about 90% of filers will be able to deduct the full value of their state and local taxes from their federal income tax, adding an estimated $320 billion to the cost of the legislation.
Once again, however, the projections fail to account for the actual, real-world implications of the provision. Because of the Alternative Minimum Tax (AMT), very few filers would even be able to claim the full deduction at the $40,000 cap used in the House bill. In other words, blue state Republicans are sabotaging this legislation for the sake of political theater — they don't expect voters to understand the nuances of tax law, and when they run for re-election next year, they want to be able to tell their constituents that they went to bat for them.
In fact, raising the SALT cap could ultimately hurt many blue state taxpayers, because Democrat elected officials in those states would use the increased cap to justify raising taxes even higher while telling voters that Uncle Sam will be offsetting a significant portion of the cost.
We're fortunate that the Trump tax cuts are coming up for renewal at a time when Republicans control the White House and both Houses of Congress. But who will be in charge the next time the tax cuts are due to expire? We should not be forcing American families to live with the anxiety of wondering whether their taxes will automatically shoot up if the political winds aren't blowing the right way in the future. Likewise, we can't expect businesses to make the long-term investments our economy needs if they can't reliably project tax rates even just a few years into the future.
Certainty and stability are essential to sound economic policy. With the savings from eliminating full and immediate expensing of structures and lowering the SALT cap back to $10,000, Congress should be able to make the individual and corporate tax reductions permanent, creating the conditions for long-term growth.
The fixes outlined above could also create room in the budget for full and immediate expensing of R&D investments. Unlike expensing of new structures, companies would eagerly take advantage of tax write-offs on their research and development costs. This was included in the 2017 Tax Cuts & Jobs Act, but is currently in the process of being automatically phased out.
Competitors such as Great Britain and China are already offering permanent, full and immediate expensing of domestic R&D investments. If America intends to keep up in the race to develop and perfect world-changing new technology like artificial intelligence, we can't afford to be out-competed by the incentives offered by other countries.
Thanks to President Trump's visionary leadership, America is on the precipice of a new Golden Age — if only Congress can get tax policy right. We only have one chance.