Bill · H.R. 110· House(119-HR-110)
Small Business Prosperity Act of 2025
- Introduced
- 1/3/2025
- Last activity
- 1/3/2025 — Referred to the House Committee on Ways and Means.
- Sponsored by
- Andy Biggs
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
The "Small Business Prosperity Act of 2025" aims to amend the Internal Revenue Code of 1986. It proposes to expand the deduction for qualified business income and make that deduction permanent. The bill increases the deduction rate for qualified business income and removes certain limitations and exclusions. Additionally, it establishes that changes in corporate organizational structures are not taxable events under specific conditions. Finally, the act repeals the estate tax while retaining the basis step-up.
Yes· 3 of 10
Would business owners be better off under this?+9
The bill greatly expands the tax deduction available for qualified trades and businesses.
Does this cut the tax on money left behind when someone dies?+9
The bill explicitly repeals the estate tax for estates of decedents dying after December 31, 2024.
Would people with substantial wealth be better off under this?+8
The repeal of the estate tax directly benefits individuals with substantial wealth and large estates.
The opposite
Does this reduce what the federal government spends?-4
The reduction in tax revenue from expanded deductions and the repeal of the estate tax will decrease federal revenue.
Who it would affect, and how
Potential Positive Impacts for People
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Expanded Business Deductions: The bill increases the deduction for qualified business income from 20 percent to 43 percent, and eventually to 47 percent for taxable years beginning after December 31, 2025 (Section 2(b)). This provides a higher deduction for qualified trades or businesses.
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Removal of Wage Limitations: The bill repeals the limitation based on W-2 wages paid with respect to a trade or business (Section 2(c)). This changes how the deductible amount is determined for a qualified trade or business.
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Broader Business Definitions: The bill repeals the exclusion of specified service trades or businesses (Section 2(d)). This redefines a "qualified trade or business" to include any trade or business other than performing services as an employee.
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Tax Neutrality for Corporate Changes: A change in a corporation's organizational structure will not be a taxable event if there is no change in owners, ownership interests, or assets, excluding de minimis changes (Section 3).
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Repeal of Estate Tax: The bill repeals Chapter 11 of the Internal Revenue Code of 1986, effective for estates of decedents dying after December 31, 2024 (Section 4).
Potential Negative Impacts for People
- No specific negative impacts are explicitly stated in the text provided.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Business Owners+9Good For High Net Worth Individuals+8Good For High Income Households+7Good For Retirees+6Good For Seniors+5
- Economy And Finance
- Reduces Estate Tax+9Improves Small Business Support+8Reduces Small Business Taxes+8Improves Economic Growth+4Increases Job Creation+3Reduces Government Spending-4
- 1/3/2025
- Referred to the House Committee on Ways and Means.
- Introduced in House