By Jessica I. Marschall, CPA, ISA AM
June 28th, 2025
In the early hours of June 28, 2025, the Senate passed what Majority Leader John Thune and others in Republican leadership have proudly branded the “Big, Beautiful Bill”; a sweeping legislative package that alters the tax code, restructures environmental regulation, and reshapes the federal-state partnership in programs like Medicaid. The final Senate vote came after a flurry of amendments, floor speeches, and negotiations designed to ensure party cohesion. The bill passed narrowly and now heads to the House, where swift passage is expected.
For weeks, our firm has been covering this proposal on MarschallTax.com, particularly from the perspective of small business owners, middle-income families, and sustainability professionals. While proponents tout the bill’s simplicity and focus on “growth,” a deeper review shows a clear redistribution of benefits: primarily favoring top earners and fossil fuel interests while imposing long-term fiscal and environmental costs.
Major Provisions Included in the Final Bill
According to NPR’s reporting and today’s NYT and Washington Post the bill includes:
Major Provisions Included in the Final Bill
Based on reporting from NPR, Politico, and The New York Times, the final Senate version includes:
- Permanent repeal of the estate tax, benefiting only the wealthiest 0.1% and reducing federal revenue by approximately $240 billion over 10 years
- Extension of 2017 Tax Cuts and Jobs Act provisions, including lower individual and corporate rates
- Elimination of the corporate alternative minimum tax (AMT)
- “No tax on tips” and overtime exemption, though civilian advocates argue this provides minimal benefit to service workers.
- Child tax credit maintained at $2,500 through 2028, then reduced to $2,000
- SALT deduction cap raised to $40,000, with full benefits limited to households earning under $500,000
- Addition of overtime pay deduction, a new credit for overtime earning
- Rollbacks to the Inflation Reduction Act’s green-energy incentives, including solar, wind, and EV credits
- Ban on state-level AI regulation for ten years, raising concerns over environmental oversight and privacy
- Medicaid work requirements and reduced federal funding flexibility, increasing administrative burdens for states
- Cuts to Medicaid provider taxes (phased from 6% to 3.5% by 2031)
- Limits on student loan repayment options, also ruled out by the Parliamentarian for the reconciliation process
- $5 Trillion increase in debt ceiling, alongside accounting changes to understate long-term costs—yielding a deficit increase ranging from $2.8 trillion to $4.7 trillion over 10 years depending on baseline
A Windfall for Pass-Through Entities—But No Guarantee of Job Creation
One of the most consequential yet underdiscussed aspects of the bill is the expansion of the Qualified Business Income (QBI) deduction under Section 199A, originally enacted in 2017. The final legislation removes prior income-based restrictions on Specified Service Trades or Businesses (SSTBs)—a category that includes law firms, accounting and consulting practices, engineering and software development partnerships, medical groups, and more.
This means that high-income professionals operating through pass-through structures—like LLCs, S Corporations, and partnerships—will now be able to deduct up to 20% of their income regardless of earnings or industry, resulting in significantly lower effective tax rates.
While this change is framed as a boon to small business, in practice it disproportionately benefits high-revenue service firms that employ few workers and rely on minimal physical infrastructure. Worse, it further incentivizes offshoring: many of these firms are already able to source labor abroad for coding, legal research, tax prep, and engineering design, reducing their domestic employment footprint while maximizing profit extraction.
The economic justification, that these tax savings will be reinvested into job creation, is weak at best. Recent research from the Congressional Research Service and Tax Policy Center shows that pass-through tax cuts largely favor capital income and have limited impact on GDP growth or domestic hiring. This change essentially rewards firms for tax structuring, not for job creation or investment in the U.S. economy.
A Continuation of Economic Segregation
As I wrote in previous blog posts (June 18 article), this legislation uses populist language to mask deeply regressive outcomes. While the phrase “no tax on tips” garners headlines, it functions as a diversion from the bill’s primary impact: expanded tax breaks for corporations and the wealthiest Americans.
The final version includes few provisions to assist middle-income families who continue to shoulder increasing costs for child care, housing, and medical coverage. Moreover, as Politico reported, the bill was shaped without bipartisan input and largely ignored budgetary scoring warnings from the Congressional Budget Office (CBO), which estimates the bill will add over $1.2 trillion to the federal deficit over the next decade.
This figure is consistent with the conclusion I drew weeks ago: we are actively digging a deeper fiscal hole, not to invest in education or infrastructure, but to deliver additional tax relief to households already enjoying historically low effective rates.
Cuts to Sustainability and the Secondary Market
The reduction or outright elimination of environmental incentives, such as solar credits and advanced manufacturing support, may be the most backward-looking element of this legislation. As someone actively engaged in the circular economy, I find the failure to even retain key provisions that encourage reuse and sustainability short-sighted and inconsistent with current market trends. It also undercuts long-term cost savings already demonstrated by these initiatives.
Corporate clients engaged in ESG reporting, or sustainable asset management should expect increased volatility, both in tax treatment and in investor scrutiny, as the United States deviates from globally aligned climate targets.
Medicaid Work Requirements and State Burden
The Medicaid revisions present perhaps the most ethically fraught element of the bill. By imposing work requirements and capping federal contributions, the bill effectively sets the stage for uneven coverage across states. As I noted in our earlier Medicaid-focused analysis, the majority of Medicaid recipients are already working, disabled, or caring for others.
These new requirements are administratively complex and do little to promote economic mobility, while posing a real threat to health outcomes—especially in Republican-led states with higher rates of uninsured residents and chronic disease.
Final Thoughts
The Senate’s “Big, Beautiful Bill” is not a neutral restructuring of the tax code. It is a highly targeted realignment of policy that benefits the wealthiest individuals, large corporations, and politically favored sectors, while shifting long-term fiscal and social burdens to the middle class, the environment, and future generations.
Its passage signals a deliberate retreat from the environmental and social investments made under the Inflation Reduction Act. At the same time, provisions like the now-struck donor credit for private school vouchers demonstrate the original intent to reward capital donors in specific ideological spheres, even at the cost of revenue neutrality and tax equity. While that particular tax shelter was removed under Senate rules, its inclusion reflects the broader objective of the bill: to create permanent, preferential structures for wealth preservation, often under the guise of middle-class relief.
What remains is a package that adds trillions to the deficit, weakens public safety nets, limits federal and state regulatory tools, and expands tax preferences for high-income pass-through entities with minimal ties to domestic job creation. There is little evidence that the bill will lead to widespread economic growth or reinvestment in American communities. Instead, it accelerates existing inequalities while undermining long-term stability.
The bill now moves to the House, where passage is expected without significant change. We will continue to monitor its implementation and provide guidance to clients navigating the regulatory and tax compliance landscape it creates.
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Jessica I. Marschall, CPA, ISA AM, is the President of MAS LLC, a tax consultancy, and The Green Mission Inc., a sustainability and deconstruction appraisal firm. She writes regularly on tax reform, ESG, and the intersection of finance and sustainability.
