House Passes Trump’s Tax Bill with Narrow Margin
Updated July 3, 2025: This piece was revised to reflect the House vote tally of 218-214.
The House has narrowly approved President Donald Trump’s prominently showcased Senate bill, edging through with a 218-214 vote. This measure heads to President Trump for his endorsement. It encompasses significant tax cuts, projected to lead to a $3.1 trillion increase in spending over the next decade. This article outlines five key aspects through which this legislation could reshape corporate taxation.
1. Corporate Tax Rates Remain Stable
Notably, the corporate tax rate has seen a substantial reduction, falling from 35% to 21%, according to the Tax Cuts and Jobs Act of 2017. This rate had remained unchanged since 1986 but was among the highest for corporations in OECD countries. Some experts argue that this high tax rate posed a competitive hindrance for U.S. businesses in a global market. Maintaining the rate at 21%, as the White House indicates, fosters a more conducive environment for new businesses and growth.
2. R&D Costs Amortized
Starting in 2022, companies will be required to amortize R&D expenses over time. This shift raises concerns about potential delays in corporate innovation. Once again, U.S. firms will have the flexibility to expense R&D immediately, contrasting the amortization requirements faced by foreign entities. This provision is particularly beneficial as it allows for upfront expense recognition, leading to significant tax advantages. Notably, this will also be retroactively applied from December 31, 2021, enabling companies to recover previously amortized costs.
3. Return of Bonus Depreciation
The bonus depreciation benefits, enabling immediate deductions for certain property purchases, have resurfaced. Initially introduced by the TCJA, these benefits were gradually set to phase out by 2027. Properties eligible for this depreciation include tangible items like equipment and vehicles, which provide immediate cash flow benefits to businesses when deducted promptly.
4. Opportunity Zone Tax Incentives Revived
The concept of opportunity zones, aimed at spurring investment in underprivileged areas, has been highlighted in the TCJA. These zones offer major tax incentives, including deferring taxes on capital gains, step-up investments on gains, and excluding new profits from taxation. While primarily beneficial to higher-income individuals, these zones encourage investment in sectors needing economic stimulation. The legislation revives these incentives for rural areas by increasing the percentage of zones required and boosting tax exclusions, enhancing urgency for wealthy investors to support rural economic growth.
5. Modest Changes to Multinational Tax Regulations
This legislation is not as sweeping as the TCJA in altering how U.S. multinational corporations are taxed. Previously, U.S. firms transitioned from a global tax framework to a quasi-territorial system, reducing the complexity of multinational tax law. The current bill maintains this structure while allowing modest increases in tax rates applicable to certain areas, thus preserving competitiveness in the global landscape.
These pivotal changes are just part of the nearly 1,000-page legislation. Should President Trump endorse it by July 4th, it would represent significant alterations for many American firms.
