From a Tax Perspective, the "Big, Beautiful Bill" is Ugly
In my forty-two years in the tax field, many pieces of legislation have been passed to “reform” the tax code. Most recently, the 2017 TCJA made substantial modifications, most of which were improvements. Based on IRS analysis, the TCJA lowered taxes for all income groups, provided the greatest benefits for middle-income households, and spurred economic growth that helped reduce poverty and improve prosperity.1
On May 22, the House of Representatives passed their version of the “Big, Beautiful Bill”. After perusing the tax related sections, I’d call the bill ugly.
The driving force behind tax policy should be generating the most revenue as efficiently as possible. That means no gimmickry, no distortions and definitely not picking winners and losers. Thoughtful tax policy simplifies the tax code, incentivizes growth and benefits all taxpayers.
When the "Big, Beautiful Bill" was first introduced, it was hailed as a major leap forward for tax reform. Politicians on both sides of the aisle voiced their support, and pundits were quick to tout it as a long-overdue solution to America’s tangled tax system. Yet, after closer scrutiny, it becomes clear that this bill is less about real reform and more about political posturing. Rather than simplifying the U.S. tax code and addressing the fundamental flaws that burden businesses and individuals alike, the bill is overly complex, riddled with loopholes, and, ultimately, fails to bring about the kind of transformation the American people need.
Complexity Over Simplicity: The Tax Code Grows, Not Shrinks
The current bill strays from these principles by creating new, complex tax law such as exempting tax on tips and overtime pay, expanding child tax credits and increasing the SALT (state and local tax) deduction. These new provisions all contain income limits and phase-outs that increase tax code complexity. They merely use the tax code to redistribute wealth and are certainly not pro economic growth. Rather than making the process of filing taxes simpler, this bill only makes it more difficult.
The Real Problem: Lack of Comprehensive Structural Reform
Beyond the specific provisions of the "Big, Beautiful Bill", its biggest shortcoming is its failure to address the fundamental structural issues of the U.S. tax system. The current tax code is riddled with inefficiencies that date back decades, and reform efforts have largely focused on tweaking the existing system rather than overhauling it for the modern economy. While unlikely, let’s hope the Senate is able to make substantial improvements to the bill that will make it less complex and more growth oriented.
The Bottom Line: A Missed Opportunity
While the “Big, Beautiful Bill” may have been pitched as a revolutionary solution to the nation’s tax problems, it falls far short of delivering on that promise. Rather than simplifying the tax code, the bill creates more confusion and complexity. Real tax reform requires a bold, comprehensive approach that tackles the root causes of complexity and inefficiency in the system. The “Big, Beautiful Bill”, however, misses the mark by favoring short-term political gains over long-term, structural change. If we truly want a tax system that works for all Americans, we need to move beyond cosmetic fixes and embrace reforms that simplify, modernize, and create a better system for everyone.
1 Justin Haskins, The Hill 12/04/2021
