Growth, Deductions, and Depreciation
What the 2025 Tax Overhaul Offers You
Washington’s done something rare: they’ve drafted a tax reform bill that might actually work. In fact, we now have two versions of it—the House-passed package and the Senate Finance Committee’s counter. And while they differ in execution, both signal serious intent to simplify the tax code, reward work, and expand incentives for domestic business growth.
And now, the Senate version has officially cleared the Finance Committee—a major procedural step that moves us one step closer to final passage.
This isn’t just another symbolic budget resolution. It’s a reconciliation bill—a powerful legislative tool that allows the Senate to pass fiscal measures with a simple majority, bypassing the usual 60-vote threshold. That means: no filibusters, no grandstanding, and—thankfully—fewer lobbyist-inflated surprises.
Having contributed to this effort through, I can say firsthand that the bill was built with entrepreneurs, working professionals, and American families in mind—not just the entrenched class or political donors. While no legislation is perfect, this one deserves real consideration from business owners who’ve been stuck reacting to tax law instead of planning around it.
Let’s walk through the key differences—and why they matter.
Child Tax Credit: Modest Divergence, Big Impact
The House version raises the child tax credit to $2,500 per child, indexed to inflation going forward. The Senate opts for $2,200, also indexed. For working families, both are steps in the right direction. And for those of us who believe in strong households as the foundation of a free-market Republic, this is the kind of signal policy we need more of.
SALT Deduction Cap: Relief in Sight?
The House proposal raises the SALT deduction cap to $40,000, offering long-overdue relief for small business owners and professionals in high-tax states. The Senate holds steady at the current $10,000 cap, likely to preserve revenue neutrality and avoid subsidizing states that overtax. This will be a major negotiation point, but even having it on the table represents progress for Schedule C and S-Corp filers who’ve been punished unfairly since the 2017 cap went into effect.
Medicaid Changes: Trim or Transform?
The House plan tightens eligibility and adds work requirements without major disruption to existing programs.
The Senate plan goes further: provider taxes in Medicaid expansion states are capped at 3.5% by 2031, down from 6%, and work rules are made stricter for able-bodied adults with dependents.
For states and hospital systems, this matters. But for federal taxpayers, it’s a long-overdue measure to ensure Medicaid doesn’t become a bottomless pit of unchecked spending. The Senate version is the heavier lift, but it’s arguably the more fiscally disciplined of the two.
Clean Energy Credits: The Drawdown Begins
Both chambers agree it’s time to start sunsetting the massive raft of green-energy tax breaks—but they disagree on timing. The House phases them out faster. The Senate takes a more gradual approach, allowing for transition periods on solar, wind, and EV credits. It’s clear Washington is beginning to re-center tax policy around productivity and output, not ideology.
Senior Deduction & Personal Income Perks
Here’s where things get more retail.
House: Adds a $4,000 standard deduction for seniors age 65+
Senate: Raises it to $6,000, phased out for incomes above $75,000 ($150,000 joint)
In addition, the Senate includes:
A $25,000 deduction for tips earned in service jobs
A $12,500 deduction for qualified overtime income
A non-itemizer charitable deduction of up to $2,000
An expanded dependent care credit covering up to 50% of costs
These are temporary measures through 2028, but they’re well-targeted and designed to reward real work—not passive income or bureaucratic positioning.
Business Tax Policy: Finally, Some Common Sense
The most compelling differences lie in the business tax provisions. The Senate version is more aggressive, forward-thinking, and ultimately more pro-growth.
Here’s what’s on the table:
100% bonus depreciation — made permanent
Full R&D expensing — restored
Section 199A passthrough deduction — maintained at 20% (vs. House’s 23%)
Section 179 expensing cap — raised to $2.5 million
Opportunity Zones — extended permanently, with tighter eligibility
Advanced Manufacturing Investment Credit — 30%
Low-Income Housing Tax Credit — increased by 12%
If you’re running a growing business, especially in construction, healthcare, skilled trades, or tech, this is where your attention should go. The depreciation rules alone can make six-figure differences in your net tax bill, and the Opportunity Zone provisions are a sleeper win for long-term real estate investors and developers.
Global Tax Compliance: More Complexity, But Less Loophole Abuse
The Senate adds meaningful changes to U.S. international tax policy—particularly the GILTI, FDII, and BEAT regimes, along with foreign tax credit limitations. There’s also a new foreign remittance fee, capping out at 3.5%, which will apply in select cross-border transfers. For domestic-focused firms, not much changes. But if your enterprise works with overseas vendors, offshore contractors, or international holdings, these revisions will need close attention—and tight compliance.
Why This Bill Is Different
Let’s be clear: this isn’t a messaging bill. It’s a reconciliation bill, meaning it’s tied directly to the federal budget and governed by strict rules. It can only include items with direct budgetary impact, and it can pass the Senate with 51 votes instead of 60. That’s why you’re seeing real movement. This isn’t a press release—it’s policy with teeth. Reconciliation forces Congress to focus: no cultural side-shows, no regulatory pipe dreams. Just numbers., And for those of us who worked on pieces of this legislation, that’s exactly what we hoped to see.
The House version focuses more on individual and family relief, while the Senate prioritizes business investment, work incentives, and domestic production. Both reflect solid compromise, balancing immediate needs with long-term economic growth. This bill is more than just tax tweaks—it brings much-needed stability and predictability to a complex system. For entrepreneurs and business owners, especially in manufacturing, healthcare, and skilled trades, these provisions could meaningfully impact growth and cash flow. Though not perfect—SALT caps and permanent incentives still need work—it marks real progress. For anyone serious about keeping more of what they earn and building sustainable wealth, this tax reform deserves close attention and proactive planning.
READ THE BILL:
U.S. Congress. (2025). H.R.1 — The "One Big Beautiful Bill" Tax Reform Act of 2025 [Legislation]. 119th Congress, 1st Session. https://www.congress.gov/bill/119th-congress/house-bill/1
