House Ways and Means Committee advances tax reform, spending cut package 

The House Ways and Means Committee advanced the Republican sweeping tax reform and spending cuts package by a party-line 26-to-19 vote on May 14. The House’s chief tax-writing committee began its nearly 17 hour-long markup of the measure on May 13 after unveiling 389 pages of legislative text by way of a “Chairman’s amendment” on May 12, following a since revised 28-page preview released on May 9. Republican leadership is aiming to have the measure reach the House floor for a full chamber vote next week.

Note. The tax package is traveling by way of the budget reconciliation process, as discussed in our May 2025 Policy Pulse. It’s critical to note that the legislative language we are reviewing is still a proposal with a perhaps long and likely bumpy road ahead. The House-proposed tax policy provisions do, however, provide a solid foundation for our understanding of what tax reform in 2025 may look like, and staying informed along the way allows for proactive tax planning.

Tax provisions

The information below provides a high-level overview of key tax provisions in the House proposal as currently drafted:

Business-related provisions

• Business interest expense limitation: For tax years 2025 through 2029, the limitation on the business interest expense deduction under section 163(j) would be taxpayer-favorably modified to compute adjusted taxable income without considering deductions for depreciation, amortization or depletion, corresponding with the financial accounting concept earnings before interest, taxes, depreciation and amortization (EBITDA).
• Bonus depreciation: 100% bonus depreciation on qualified property under section 168(k) would be restored and extended from Jan. 20, 2025, through 2029, generally, or Jan. 1, 2031, for longer production period property and certain aircraft. Additionally, the proposal would create a new section 168(n) provision to establish an elective 100% depreciation allowance for certain nonresidential real property deemed as qualified production property (QPP).