Sponsors (46)
The bill permanently lowers and stabilizes taxes for pass-through businesses and provides planning certainty, but it reduces federal revenue and may make the tax system less progressive.
Small-business owners and pass-through taxpayers will permanently retain a 20% qualified business income deduction, lowering their federal tax bills.
Businesses and households gain tax-planning certainty because the deduction no longer expires, making long-term financial and investment decisions easier.
Taxpayers overall may face higher federal deficits or reduced government resources because making the deduction permanent reduces federal revenue.
Owners of pass-through entities—often higher-income taxpayers—may benefit disproportionately compared with low-income workers, reducing the progressivity of the tax code.
Based on analysis of 2 sections of legislative text.
Permanently preserves the qualified business income (QBI) deduction by removing the statutory expiration provision that would have ended the deduction. It does not change how the deduction is calculated or who qualifies; it only makes the existing tax rule permanent rather than temporary. This change affects owners of pass-through businesses (sole proprietors, partnerships, S corporations, and some trusts/estates) and individual taxpayers who claim the QBI deduction, and it reduces future uncertainty about whether the deduction will lapse at a later date.
Introduced January 23, 2025 by Steve Daines · Last progress January 23, 2025