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On 13 May 2025, the House Ways and Means Committee released ‘The One, Big, Beautiful Bill’, which has initiated the advancement of President Donald Trump’s pro-worker, pro-America economic and national security agenda by passing a fiscally responsible budget resolution. The proposed bill addresses the expirations of the 2017 Tax Cuts and Jobs Act (TCJA) and incorporating some of President’s campaign proposals.
The bill offers new tax relief to American workers and small businesses fostering a new era of growth and prosperity. The House Draft bill primarily focuses on permanently extending the lower rates and brackets from TCJA, which includes reduction of the individual tax rates from 39.6% to 37%, includes the increased deduction for foreign derived intangible income (FDII) and global intangible low-taxed income (GILTI) under section 250 of the Code, the reduced rate of tax under the Base Erosion and Anti-Abuse Tax (BEAT) under section 59A of the Code.
The Trump campaign proposed eliminating taxes on tips and overtime pay, focusing on benefits for lower-income taxpayers, increasing the limitation of deductions for state and local taxes, terminating various energy and vehicle credits set to expire after 31 December 2025, and introducing Money Accounts for Growth and Advancement (MAGA) accounts. He also promised to enhance deductions for senior citizens and increase the limit for estate and gift tax exemptions. The bill proposes imposing excise taxes on outbound remittances by non-citizens and enforcing measures against unfair foreign taxation.
The “One, Big, Beautiful Bill” introduced in the House by the Republicans proposes to make permanent several of the expiring provisions of the 2017 TCJA Act. However, there are several new temporary provisions brought in that will provide only interim relief and future governments may have to address those matters at the end of their expiry periods.
From an international perspective, the proposed 5% excise tax on outbound remittances by non-citizens will impose an additional cash flow burden on green card holders and other non-immigrant visa holders. The proposed excise tax will be a refundable tax credit, and individuals with valid Social Security numbers will be able to claim these credits and, hence, may not be doubly taxed. However, there may be cash flow concerns if individuals have to wait for refunds, especially if the excise tax exceeds their tax liability.
The excess taxes being proposed on taxpayers in jurisdictions imposing alleged unfair taxes on American taxpayers appear to be a retaliatory measure towards jurisdictions that are implementing the OECD Pillar 2 rules and other taxes such as the Digital Services Tax (DSTs) aimed at American tech companies. This provision gives the IRS the ability to charge taxes up to 20% higher than the applicable statutory rate for taxpayers from such jurisdictions who have US income or other US business interests. Similar to the reciprocal tariffs introduced, this measure appears to be an income tax version of retaliatory provisions aimed at negotiating with countries that have rules which are not favourable to American multinationals.
Over the next few weeks, both the House and the Senate will deliberate and vote on this bill. While taxpayers are eagerly awaiting the final version that makes it to legislation, affected individuals and businesses must start appropriate planning measures to ensure they stay ahead of the curve.
Dhruti Biswas, Manager, Tax, Grant Thornton Bharat, has also contributed to this tax alert.
The bill is designed to overhaul ineffective tax policies, through reforms that aim to benefit working families and prioritise economic interests of the US.
