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. It contains significant changes from what the House passed in May, especially on taxes, Medicaid 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. Healthcare 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 of 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: slashing the annual deduction for individual state and local taxes (SALT) from $40,000 to $10,000.
But that provision is described in the bill’s official summary 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,” Sen. Ron Johnson of Wisconsin told reporters soon after the unveiling, reiterating 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:
Business-friendly measures
A key focus for business owners is a series of tax deductions that will reinstate credits for corporations around things like property depreciation, 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.
Employees would be able to deduct up to $25,000 annually for tips and overtime, in contrast to the House’s approach of 100% deductibility under certain income limits.
The Senate blueprint also includes 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, executive director of the left-leaning Institute on Taxation and Economic Policy, reacted to the released proposal by saying that “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 potentially an issue for the Senate parliamentarian, given the Senate’s complex reconciliation rules.
Other changes less welcomed by the business community
Other changes in the bill appear to cut against 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: the so-called revenge tax.
This idea 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 that 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 that “we still view late July as the real deadline.”
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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