Updates on Federal Taxes | H.R.1 One Big Beautiful Bill Act

Last week, the U.S. House voted by a narrow margin of 215-214 to pass H.R.1 – One Big Beautiful Bill Act, the top legislative priority of the Trump Administration and Congressional Republicans in 2025. This legislation is a critical pro-growth initiative that would make the 2017 tax extenders and reforms permanent. While it reduces federal expenditures by $1.6 trillion, the Penn Wharton Budget Model estimates it would increase the federal deficit by $3.2 trillion over the next decade, excluding potential economic growth and tariff revenue impacts.

The One Big Beautiful Bill proposes extending key provisions of the 2017 Tax Cuts and Jobs Act (TCJA), including individual, estate, business, and international tax measures. These permanent tax relief provisions aim to promote economic prosperity and stability for American workers and businesses. In addition, The bill eliminates or substantially limits several tax credits designed to encourage investment and production of clean energy, alternative fuels, and electric vehicles. A number of these credits were created or expanded under the Inflation Reduction Act of 2021.
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The bill proposes a reduction in federal deficit spending with direction from specific U.S. House Committees to cut expenses or increase non-tax revenues. It recommends approximately $900 billion in reductions to Medicaid by reforming work and eligibility requirements for able-bodied adults, $290 billion from the Supplemental Nutrition Assistance Program (SNAP) through state and eligibility reforms, and $350 billion from federal student loan and grant programs.

The One Big Beautiful bill now heads to the U.S. Senate for consideration and debate, with anticipated amendments expected over the summer.

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