Where the Republican Tax Bill Falls Short

The House’s taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. reform plan chooses flashy cuts over pro-growth alternatives.

The House of Representatives just passed President Trump’s “One Big Beautiful Bill,” marking a critical step in the Republican tax agenda. At first glance, the bill might appear to complete the legacy of the 2017 Tax Cuts and Jobs Act (TCJA). But it falls short of emulating the TCJA’s core strengths in two key respects: it doesn’t prioritize economic growth, and it doesn’t simplify the tax code.

Though the TCJA wasn’t perfect, it struck several pro-growth bargains. Its authors were right to prioritize making the 21 percent corporate tax rate permanent, while accepting, as a budget compromise, that individual tax cuts would expire at the end of 2025. Unfortunately, the law also made 100 percent bonus depreciation for short-lived assets—another key pro-investment provision that lets companies immediately deduct equipment and machinery—temporary. It also introduced research and development (R&D) amortization, which penalizes investment by forcing companies to spread R&D deductions out over several years. Still, the 21 percent corporate rate was a major boost for growth and competitiveness and locking it in was crucial.