Breaking Down the “One Big Beautiful Bill”: The Wins, the Worries, and the What-Were-They-Thinking?

U.S. House of Representatives Speaker Mike Johnson and other Republican House members celebrate following the signing of U.S. President Donald Trump’s sweeping spending and tax bill, on Capitol Hill in Washington, D.C., U.S., July 3, 2025.

Congress has passed the “One Big Beautiful Bill Act,” a sweeping tax package that extends key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) while introducing a mix of new measures. Like most major legislation, this one includes a blend of smart reforms, questionable spending, and some unnecessarily complicated features.

The Wins

The bill’s strongest points revolve around stability and growth. It makes permanent full expensing for short-lived assets and R&D, a move expected to boost long-term economic investment. It also locks in the 2017 individual tax rates, raises the standard deduction, and simplifies itemized deductions for most taxpayers.

The Senate’s version improves on the SALT deduction cap, raising it to $40,000 (for those earning under $500,000) through 2029. Meanwhile, both chambers agree on raising revenue by scaling back green energy tax credits introduced in the Inflation Reduction Act, particularly those with limited impact like EV and residential energy subsidies.

Other smart moves include a permanent, inflation-adjusted estate tax exemption of $15 million and improved international tax rules to reduce double taxation for U.S. multinationals.

The Worries

Despite its strengths, the bill includes costly political giveaways: temporary tax breaks on overtime, tips, and car loan interest. These provisions cost over $350 billion in the Senate version alone and add unnecessary complexity to the code.

The pass-through business deduction is made permanent at 20% in the Senate and expanded to 23% in the House, creating further imbalance between corporate and non-corporate taxation and costing up to $800 billion over the next decade.

The overall price tag is steep. The Senate version reduces revenue by $5 trillion over 10 years, contributing to a projected $2.9 trillion increase in the deficit—even after accounting for new spending cuts.

The What-Were-They-Thinking?

Rather than simplifying the tax code, the bill adds layers of complexity. New exclusions for tips and overtime include numerous conditions. Modifications to clean energy credits retain difficult-to-navigate rules and introduce new ones, such as restrictions related to “foreign entities of concern.”

The bill also introduces “Trump Accounts”—a new savings vehicle offering a $1,000 baby bonus and annual tax-deferred contributions. But with narrow eligibility and tax penalties on withdrawals, these accounts add more confusion to an already cluttered landscape of savings tools.

A new tax credit for donations to scholarship-granting organizations also demands significant administrative oversight, adding further strain to an already burdened IRS.

The Verdict

The One Big Beautiful Bill delivers meaningful long-term certainty for households and businesses through permanent rate cuts and expensing provisions. However, its costly political additions and increased complexity miss the opportunity to responsibly reform and simplify the tax system. The bill moves in the right direction on some fronts—but falls short of true tax reform.

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