Neil Bradley
Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy, U.S. Chamber of Commerce
Published
June 09, 2025
Last month, the U.S. House of Representatives took a crucial step toward averting the largest tax increase in American history at the end of this year, when many of the historic reforms enacted in the 2017 Tax Cuts and Jobs Act (TCJA) are set to expire. That step was passing the first cut of President Trump’s “One Big Beautiful Bill Act” and preparing it for Senate consideration.
House passage of such a wide-ranging budget reconciliation bill was no small feat, and we commend the members and staff of the Committee on Ways and Means who worked diligently over the past 18 months to realize this important milestone on the road to tax certainty and stability.
As part of our Growing America’s Future campaign, the U.S. Chamber has called on policymakers to prioritize tax policies that would help achieve the goal of at least 3% annual economic growth. Ensuring that America has a stable, pro-growth, and globally competitive tax code is central to this effort.
The House has taken a substantial step toward this goal but left some important work for the Senate to address, as outlined below.
Preserving Our Competitive Business Tax Rates
Low marginal tax rates promote capital formation and minimize the effects of other distortions in the tax code, all of which contribute to economic growth. Accordingly, we have urged Congress this year to preserve our competitive tax rates for businesses of all types and sizes by maintaining the 21% corporate income tax rate and permanently extending the 20% deduction for qualified business income (QBI).[1] The House-passed bill would do both of those things—and more.
The House bill would not only make the QBI deduction permanent but also increase the deduction’s value by three percentage points, from 20% to 23%. It would also make several taxpayer-favorable changes to the phase-in of existing limitations, expanding eligibility for the deduction to more businesses.
House tax writers are to be commended for ensuring the long-term competitiveness of our business tax rates, giving companies of all types and sizes the confidence they need to invest, hire, and grow.
Restoring a Pro-Growth Business Tax Base
Equally important as the competitiveness of a jurisdiction’s tax rates is the composition of its tax base to which those rates are applied. In this regard, the U.S. Chamber has long championed reforms that would restore the competitiveness of our business tax base by permanently reinstating three critical business tax policies: (1) the immediate deduction of research and development (R&D) expenses; (2) 100% bonus depreciation (full capital expensing for certain business assets); and (3) a globally competitive (EBITDA-based) limitation on the deduction of business interest expense.
The House-passed bill would generally reinstate all three polices for five years, retroactive to January 2025 through the end of 2029. The bill would also introduce a new pro-growth policy, elective 100% expensing for “qualified production property,” allowing businesses to immediately expense the cost of new factories and other production facilities. Collectively, these four provisions are designed to strengthen the industrial capacity of the United States, promote capital investment and modernization, and facilitate job creation. Coupled with the preservation of our business tax rates, the bill would reassert America’s tax competitiveness in the global tug-of-war for cross-border investment.
We applaud House tax writers for advancing legislation that would temporarily restore a pro-growth business tax base in the United States. In so doing, the bill would temporarily eliminate the tax bias against capital investment and help businesses invest, create jobs, and boost the economy while simplifying the tax system. But if policymakers seek to maximize economic growth, the Senate must take the next step to make the bill’s business tax provisions permanent.
As history shows, certainty and stability are critical to driving major, long-term capital investment. And the economic data bear this out: according to the Tax Foundation, making all four business tax incentives permanent would increase long-run GDP by 1.0%—more than double the 0.6% long-run GDP effect of the House-passed tax package as a whole. We therefore urge Senate tax writers to heed our call and empower American businesses and workers to realize the full potential of permanent, pro-growth tax reform.
Maintaining a Globally Competitive U.S. International Tax System
The House-passed bill seeks to maintain the overall competitiveness of our post-TCJA international tax system by permanently extending the current (lower) effective U.S. tax rates on two principal categories of international business income: foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI). The bill would also permanently extend the current base erosion and anti-abuse tax (BEAT) rate.
We commend House tax writers for taking action to prevent these scheduled tax increases from occurring at the end of the year, which would otherwise reduce the incentives for multinational companies to maintain their headquarters and intellectual property in the United States while decreasing America’s attractiveness as a destination for inbound business investment. Like many of the bill’s other proposed changes, permanently extending the effective U.S. tax rates on international business income would provide U.S. multinational groups the predictability necessary to support continued investment and innovation. But unlike those other changes, merely preventing these scheduled tax increases alone would ultimately fail to ensure the global competitiveness of our international tax system in the years ahead.
With Senate tax writers poised to take up the House-passed legislation, now is the time to address certain structural issues inherent in the TCJA’s design that are known to cause excessive or double taxation of U.S. multinationals or otherwise undermine congressional intent. Perhaps the most obvious example is the current 20% GILTI foreign tax credit “haircut,” which is a form of structural double taxation without analog or precedent anywhere in the world. Other examples involving not only GILTI but also FDII and BEAT abound and are ripe for Senate consideration.
Additional Opportunities for Improvement
Like any major piece of tax reform legislation, the House-passed bill includes a wide range of proposals animated by different—and sometimes competing—policy aims. Perhaps nowhere is this phenomenon more apparent—or in need of Senate attention—than with the bill’s more than $560 billion in proposed changes to energy tax policies on which many businesses, workers, and investors rely. Under the House bill, several pro-growth energy tax incentives would be severely restricted, phased out early, or even terminated, and the legislation would accelerate the sunset of numerous others that, under current law, run well into the 2030s or beyond.
As the legislative process moves to the Senate, we will continue to urge policymakers to preserve pro-growth tax policies that enhance U.S. energy competitiveness and security, including credits for clean hydrogen production and carbon oxide sequestration, as well as technology-neutral credits to help meet the country’s rapidly growing demand for electricity generation. These policies alone are poised to unleash tens of billions of dollars in private investment that would revitalize America’s industrial base and domestic manufacturing, creating stable, long-term employment in support of U.S. energy dominance.
Looking Ahead
Maintaining a globally competitive business tax system that fuels economic growth and opportunity for all Americans remains a top U.S. Chamber priority. The House-passed legislation represents a critical step forward in the 2025 tax reform debate. As the bill advances in the Senate, we will continue to engage policymakers and the administration to secure permanent, pro-growth tax reforms that drive American innovation, boost investment, and benefit workers, businesses, and communities nationwide.
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About the authors
Neil Bradley
Neil Bradley is executive vice president, chief policy officer, and head of strategic advocacy at the U.S. Chamber of Commerce. He has spent two decades working directly with congressional committee chairpersons and other high-ranking policymakers to achieve solutions.
Watson M. McLeish
Watson McLeish is senior vice president for Tax Policy at the U.S. Chamber of Commerce, where he serves as the primary adviser on all tax policy-related matters.
