Fact check: How do the tax breaks in the big beautiful bill compare to the 2017 Tax Cuts and Jobs Act?

1. Why permanence matters — the TCJA’s sunset vs. OBBBA’s lock-in

The TCJA enacted in 2017 was built with a mix of permanent corporate changes and temporary individual provisions designed to sunset after 2025, creating fiscal uncertainty and scheduled revenue increases absent legislative action. Reports in early 2025 mapped these expirations and the economic questions they raised, noting distributional and revenue tradeoffs if Congress did not act ^{[4] [5] [6]}. The OBBBA’s central move is to make most of those expiring TCJA provisions permanent, removing that sunset and thereby locking in lower federal revenues and longer-term incentives for investment and labor market responses ^{[1] [2]}.

2. New individual tax breaks — more than a continuation of 2017 law

Beyond permanence, the OBBBA introduces several new individual tax provisions not present in the TCJA: increased standard deductions, enhanced senior deductions, a deduction for car loan interest, an overtime premium deduction, elimination of tax on tips, and the creation of “Trump Accounts” for children. State analyses show these measures reduce state tax bases and collections in practice — Montana’s income tax revenue, for example, is estimated to fall by roughly $114.2 million from these changes alone — signaling broader sub‑federal fiscal effects ^{[7] [3] [8]}.

3. Business tax continuity and expansion — full expensing stays and grows

Both laws emphasize business expensing and lower marginal tax rates as pro-growth measures. The TCJA introduced accelerated depreciation and more favorable corporate taxation; OBBBA not only retains those corporate elements but formalizes them permanently, including full expensing for machinery and equipment. Analysts argue that making full expensing permanent preserves or enhances incentives to invest, which can raise long-run output; however, permanence also raises long-term revenue costs compared with temporary provisions that would have expired under the TCJA schedule ^{[6] [2]}.

4. Fiscal arithmetic — bigger net tax cuts and offsetting spending moves

The scale of OBBBA’s changes differs sharply from the TCJA’s original cost profile. Post‑passage analysis attributes net tax cuts of roughly $4.5 trillion and attendant spending reductions of about $1.2 trillion under the 2025 law package, indicating a far larger fiscal shift than the original 2017 act when judged over comparable budget windows. That arithmetic underscores why several institutions warned about revenue implications and why proponents argue economic growth will offset some costs while critics highlight widening deficits and distributional consequences ^{[1] [2]}.

5. Distributional and economic debate — incentives vs. carve-outs

Proponents frame the OBBBA as enhancing incentives to work, save, and invest by locking in lower rates and full expensing, echoing TCJA goals of competitiveness and simplicity. Opponents counter that OBBBA introduces numerous targeted carve-outs—from overtime and car‑loan interest deductions to child “Trump Accounts”—that increase complexity and may be fiscally costly without broad-based economic justification. Contemporary analyses present both arguments: growth potential from permanent business incentives and concerns about equity and fiscal sustainability from added individual carve-outs ^{[2] [3] [8]}.

6. State and local fallout — lost revenue and uneven impacts

State-level assessments immediately flagged OBBBA’s direct effect on state tax bases, with analyses showing real revenue losses and divergent distributional effects across states. The Montana estimate of a $114.2 million income tax revenue decline typifies how federal changes cascade to state budgets, potentially forcing local adjustments or service tradeoffs. These state analyses reinforce that OBBBA’s expansion of individual deductions and exclusions does not merely alter federal accounts but reshapes sub‑federal fiscal landscapes ^{[7] [3]}.

7. What to watch next — implementation, IRS rules, and political framing

Implementation details, IRS guidance, and future legislative tweaks will determine how OBBBA’s permanent provisions and new carve-outs operate in practice; administrative rules and enforcement will affect revenue realization and taxpayer behavior. The bill’s political branding and timing—signed July 4, 2025—signal partisan objectives and messaging that may shape further adjustments or repeal efforts. The record shows a mix of fiscal analysis and political advocacy around permanence, cost, and growth claims, suggesting ongoing debate over whether the net economic benefits justify the long-term fiscal tradeoffs ^{[1] [4]}.