The bill accelerates and expands tax deductions—boosting cash flow and near‑term investment for businesses, farmers, and property owners—at the cost of reduced federal revenue, added administrative complexity, and skewed benefits toward investors and owners rather than renters and wage earners.
Businesses (including small businesses) and farmers can immediately expense 100% of qualifying property placed in service after Sept. 27, 2017, increasing cash flow and lowering taxable income for current investments.
Businesses that incur research and experimental (R&E) costs can deduct those expenses immediately rather than amortizing them, reducing taxable income in the year paid or incurred and simplifying near-term financing for R&D.
Owners of residential and nonresidential real property — including pass-through owners (REITs, partnerships, S corps) — receive inflation-adjusted depreciation deductions, preserving deduction value against price-level changes and increasing allowable deductions for pass-through owners.
All taxpayers and the federal government face reduced tax revenue because expanded immediate expensing and larger depreciation deductions lower taxable income, which could increase the federal deficit or force spending cuts or higher taxes elsewhere.
Large firms and higher‑income investors (and property owners) are likely to receive disproportionate tax benefits from expanded expensing and depreciation, concentrating benefits among those with more investment and potentially widening after-tax income inequality.
Renters and wage earners may be disadvantaged relative to property owners because larger property-related deductions primarily benefit landlords and commercial property owners, shifting after-tax burdens toward non-owners.
Based on analysis of 4 sections of legislative text.
Makes 100% bonus depreciation permanent, adds an inflation-indexed multiplier for real property depreciation, and restores immediate expensing of R&E costs.
Introduced June 12, 2025 by Glenn Grothman · Last progress June 12, 2025
Makes several permanent and retroactive tax changes to speed business investment and simplify treatment of certain costs. It permanently sets bonus depreciation at 100% for qualifying property (treating that change as if it were included in the 2017 tax law), restores immediate expensing for research and experimental (R&E) costs instead of requiring amortization, and creates a new inflation-indexed multiplier that increases routine depreciation deductions for residential and nonresidential real property. The bill also includes technical changes limiting certain long‑term contract property to assets with a 7‑year recovery period or less, allows taxpayers to opt out of the new depreciation multiplier for specific property, requires parallel adjustment for minimum tax/AMT calculations, and makes varied effective dates (including retroactive and transition rules).