Senate Republicans are rushing to meet Donald Trump’s self-imposed July 4th deadline to pass his massive “One Big, Beautiful Bill.” In a recent marathon session, senators convened at the Capitol for hours, proposing amendments to the legislation.
The One Big Beautiful Bill Act has sparked debate about its potential impact on the nation’s small business community. As lawmakers consider this comprehensive legislation, entrepreneurs and policy analysts are examining whether the proposed measures would create meaningful advantages for smaller enterprises or potentially burden them with new challenges.
Small Business Implications
The legislation’s effects on small businesses depend primarily on how its various provisions will be implemented and enforced. Small business advocates are particularly focused on several key areas where the bill could influence their operations, including regulatory compliance requirements, tax implications, and access to resources.
Small businesses, which employ nearly half of America’s private workforce, are too often overlooked in Washington. The debate surrounding the “One Big Beautiful Bill Act” is no exception. While much discussion has focused on the bill’s price tag and spending cuts, significantly less attention has been paid to how its tax policies will specifically affect small businesses.
Kip Eideberg, Vice President of Government & Industry Relations for the Association of Equipment Manufacturers, published an article in the Washington Examiner stating that small businesses nationwide—including the wholesaler-distributors and equipment manufacturers his association represents—have been grappling with high prices and economic uncertainty. They urgently need policies that foster growth. Eideberg argues that the “big, beautiful bill” addresses this by enacting numerous tax policies designed to help businesses reinvest in their workforce, expand operations, and stimulate economic growth.
Key Investment Incentives for Small Businesses
According to Mr. Eideberg’s analysis, the legislation contains several targeted provisions designed to enhance the long-term viability of small businesses.
The Qualified Business Income Deduction
For example, the legislation makes the Section 199A small business deduction permanent. It expands it to a full 20%, offering long-term relief and certainty to more than 25 million businesses, according to IRS data. Since its introduction in 2017, this deduction has supported 2.6 million jobs, contributed $161 billion in annual employee wages, and added $325 billion to the U.S. GDP, based on research from Ernst & Young.
Research and Development Tax Relief
The bill proposes reinstating immediate expensing for research and development expenditures, reversing the 2022 expiration of a policy that had been in place for seven decades. This restoration would enable businesses to deduct R&D costs in the year they are incurred, rather than spreading those deductions across multiple years. Supporters argue this change would encourage innovation, facilitate technology adoption, and help American businesses maintain competitive advantages in rapidly evolving markets.
Equipment Investment Acceleration
The legislation also includes provisions for 100% bonus depreciation on new equipment purchases. Under this framework, businesses could immediately deduct the full cost of machinery and equipment investments rather than depreciating these assets over their traditional useful life spans. This immediate write-off mechanism is designed to reduce the upfront financial burden of capital investments and potentially accelerate business modernization efforts.
Generational Transfer Protection
A significant component of the bill addresses estate tax concerns for family-owned enterprises. The legislation would expand and permanently establish estate tax exemptions, addressing what proponents call the “death tax” burden that currently subjects family businesses to a 40% tax rate during generational transitions.
Many family-owned businesses face a common financial challenge: they possess substantial asset value but maintain limited liquid capital. When ownership transfers between generations, the current tax structure can force these businesses to secure loans, liquidate assets, or postpone critical investments in technology and equipment to meet their tax obligations.
By eliminating or reducing this tax burden, the legislation aims to free up capital that family businesses could instead direct toward operational improvements, technological upgrades, and strategic investments that support long-term growth and competitiveness.
Economic Growth Projections and Historical Context
Administration’s Economic Forecasts
The Council of Economic Advisers has released projections suggesting the proposed tax legislation could generate substantial economic benefits over the next four years. Their analysis estimates potential long-term GDP growth of up to 4.9%, accompanied by annual real wage increases reaching $7,200 per worker. For families with two children, the projected benefit could reach $10,900 annually.
Building on Previous Tax Reform
These projections position the new legislation as an extension of economic policies initiated with the 2017 Tax Cuts and Jobs Act (TCJA). Proponents point to the financial performance following that legislation as evidence of tax reform’s potential effectiveness.
By 2019, several key economic indicators had reached notable levels: unemployment dropped to 3.5%—a five-decade low—while real median household income increased by approximately $4,400, representing nearly 7% growth. Supporters argue these metrics demonstrate the positive economic momentum generated by the earlier tax changes.
Small Business Growth Narrative
Mr. Eideberg contends that the TCJA enabled significant expansion opportunities for small businesses across multiple dimensions. According to his analysis, reduced tax burdens allowed these enterprises to pursue facility expansions, increase their workforce, enhance compensation packages, and develop comprehensive employee training and benefits programs.
This combination of business investment and workforce development, he argues, created a cycle of opportunity that strengthened both individual companies and the broader labor market. The proposed legislation aims to build on this foundation, potentially amplifying these effects through additional tax relief measures.
Economic Modeling Considerations
While these projections present an optimistic economic scenario, the actual outcomes will depend on numerous factors, including implementation details, broader economic conditions, and how businesses choose to deploy any additional capital freed up through tax savings.
Moving Forward
As the legislative process continues, the true measure of success for small businesses will depend on the specific details of final implementation and whether the bill’s provisions create net benefits or obstacles for entrepreneurs trying to grow their companies and create jobs in their communities. Huckabee CPA will issue a comprehensive article outlining the key tax provisions, key takeaways, and talking points on the Senate’s final legislation, should it be passed into law.
