Senate Finance Proposes Major Tax Changes in One Big Beautiful Bill

The House and Senate versions of President Donald Trump's One Big Beautiful Bill Act differ notably on key tax provisions, with the Senate Finance Committee's version maintaining the current $10,000 SALT deduction cap while allowing some pass-through entity tax deductions, contrasting with the House's proposed increase to a $40,000 SALT cap with phaseouts. This discrepancy has caused frustration among House Republicans, who feel the Senate has diverged significantly from their negotiated budget agreement, especially concerning Medicaid work requirements and green energy tax credit phaseouts. Senate changes have led to growing opposition from House GOP members, including fiscal hawks seeking deeper cuts to spending and a more aggressive approach to phasing out green energy credits. Additionally, renewable energy trade groups express concern that both versions of the bill contain problematic provisions restricting tax credits to projects linked to “prohibited foreign entities,” which could hamper clean energy investments and supply chains involving China. Experts note the Senate bill offers only minor clarifications to these foreign entity restrictions, leaving major issues unresolved. The legislative process continues to be closely watched as negotiations persist over these contentious provisions and the bill's future trajectory.