The Big Beautiful Bill: Tax Reform Package

The U.S. The House of Representatives has passed the "Big Beautiful Bill" (BBB), a expansive tax reform proposal that updates key provisions of the 2017 Tax Cuts and Jobs Act. The 1,000 page bill aims to streamline the tax code, encourage investment, and offer relief to middle class families, workers, and institutions. The Bill is now headed to the Senate, where debate and revisions are expected ahead of potential July 4 passage.
 
Tax Relief for Individuals and Families
A significant feature of the BBB is the permanent increase in the estate and gift tax exemption to $15 million, beginning in 2026, providing relief to families, farmers, and small business owners who wish to transfer assets without large tax burdens.

The bill also raises the state and local tax (SALT) deduction cap to $30,000 for households earning under $400,000. This move provides relief to middle-income taxpayers by phasing out benefits at higher income levels. It also closes workarounds that previously allowed taxpayers to use charitable contributions to bypass SALT caps.
 
Additionally, the Qualified Business Income (QBI) deduction, important for small business owners, would become permanent and increase from 20% to 23%. This change offers certainty and simplified rules for entrepreneurs.
 
Supporting Growth and U.S. Competitiveness
The BBB includes several provisions designed to enhance the United States' economic competitiveness. It preserves current low tax rates on foreign income earned by U.S. companies. It keeps the existing framework of the Base Erosion and Anti-Abuse Tax (BEAT) to discourage profit moving overseas.
 
The bill also rolls back IRS reporting thresholds introduced in 2021. It restores the previous $20,000/200-transaction threshold for platforms like Venmo and PayPal and raises the contractor reporting limit from $600 to $2,000—reducing administrative tasks for small businesses.
 
Reshaping Energy and International Tax Policy
In a shift from previous climate policy, the BBB accelerates the phase-out of certain clean energy tax credits and limits access for companies with ties to foreign adversaries. New rules would block credits for firms that rely on supply chains or intellectual property from countries such as China or Russia—reinforcing national security concerns in tax policy.
A newly proposed international tax rule (Code 899) would impose higher tax rates on entities connected to countries that implement discriminatory tax practices against U.S. companies. This aims to protect American businesses from emerging global minimum tax regimes viewed as unfairly targeting U.S. multinationals.
 
Changes for Nonprofits and Higher Education
The bill offers benefits and increased scrutiny for the nonprofit sector. It reinstates a small charitable deduction for non-itemizers while tightening unrelated business income tax (UBIT) rules to ensure that income unrelated to an organization's charitable mission—such as logo licensing or private research—is appropriately taxed.
 
Private foundations and prestigious universities would face a new tiered tax system based on the size of their assets per student.
 
Oversight on Executive Compensation
The BBB expands existing excise taxes on compensation at tax-exempt organizations. It would apply to all current and former employees earning over $1 million rather than just the five highest-paid employees. This change is designed to align nonprofit executive pay practices more closely with public expectations and fiscal expectations.
 
Looking Forward
Because the bill is advancing through the budget reconciliation process, it only needs a simple majority in the Senate to pass. However, some changes may be revised or removed to comply with Senate rules and satisfy concerns about deficit impacts.
 
Conclusion
The "Big Beautiful Bill" is focused on reducing complexity, encouraging growth, and U.S. economic interests. It offers more certainty to families, employers, small businesses, and investors while simultaneously moving toward more fiscal responsibility. While the Senate will likely impact the final version, the BBB is a step forward in modernizing tax code. ​