The combined budget reconciliation bill containing the many tax provisions approved by the House Ways and Means Committee failed to make it out of the House Budget Committee on Friday. The 1,116-page bill combined legislative proposals from 11 House committees. Its short title is the “One Big Beautiful Bill Act.”
The Budget Committee held a markup of the legislation on Friday morning and voted 16 for and 21 against approving it. Five Republicans joined with Democrats on the committee to vote against advancing the legislation.
On Thursday, at least one Republican member of the committee went on social media to complain about the bill. The bill has not yet been officially scored, and one complaint was that the cost of the legislation is unknown.
The Committee for a Responsible Federal Budget estimates that the bill would “boost total deficits through FY 2034 by roughly $3.3 trillion” and increase the federal debt by roughly the same amount (Committee for a Responsible Federal Budget, “Adding Up the House Reconciliation Bill” (May 14, 2025)).
House members from various high-tax states expressed opposition to the fact that the bill would only increase the SALT cap (i.e., the maximum amount of state and local taxes that an individual can deduct on their federal return) from $10,000 to $30,000. During the House Ways and Means Committee markup of the tax portion of the bill, Rep. Tom Suozzi, D.-N.Y., proposed an amendment that would have increased the SALT cap to $80,000 and proposed to pay for it by reinstituting a 39.6% top tax rate for individuals. The amendment was defeated — 17 voted for the amendment, 25 against.
The SALT cap was originally enacted as part of the Tax Cuts and Jobs Act (TCJA), P.L. 117-95, and was designed to offset revenue losses from tax cuts in the TCJA. The Joint Committee on Taxation says that the $30,000 SALT cap (along with other changes to deductibility of state and local taxes in the bill) would raise $916 billion in the years 2025 through 2034 when compared with the currently scheduled expiration of the SALT cap (Joint Committee on Taxation, Estimated Revenue Effects of Provisions to Provide for Reconciliation of the Fiscal Year 2025 Budget (JCX-22-25 R) (May 13, 2025)).
The AICPA opposes provisions in the Ways and Means bill that it said target the ability of service businesses structured as passthrough entities to deduct their state and local taxes from their federal tax.
The fate of the bill is now unknown.
— Alistair M. Nevius, J.D., is a freelance writer in North Carolina. To comment on this article or to suggest an idea for another article, contact Neil Amato at Neil.Amato@aicpa-cima.com.
Updates on individual tax and business tax are among the many topics on the agenda at the AICPA & CIMA National Tax Conference. Nov. 17-18 in Washington, D.C., and online.
