Concern over Losing Edge in Global Competitiveness Aside, ‘Big, Beautiful Bill’ Wins Praise from Small Businesses

WASHINGTON, July 4, 2025 — Barring the diatribe launched by some economists and industry players, especially automotive and clean energy stakeholders, the ‘big, beautiful bill’, has by and large, received a thumbs up from small businesses in the country.

While some economists say, that the bill will make US less competitive globally, sops offered by the tax bill, for smaller businesses and technology firms, have led to a cheer among them.

After the bill cleared Congress, interestingly, it found some opposing takes, in the form of criticism for its “less focus” on Research and Development (R&D), and simultaneously praise for its measures regarding Research and Experimental (R&E) expenses.

R&D v/s R&E

Speaking with Al-Jazeera, Harry G Broadman, Former Assistant US Trade Representative said the bill doesn’t focus enough on sharpening the competitive edge of American industries. 

Harry said lack of focus on skills of US workers, and less attention to the research and development in the bill are discouraging signs.

“The bill doesn’t focus enough on sharpening the skills of US workers and also not on research and development, particularly applied research and development that makes America more competitive against the Chinese and our partners in the G7,” said Harry.

He said those G7 nations have taken more steps to sharpen science and technology in their economies.

“Competitiveness is a part of our factories and the products and services that we produce. But what about the workers and children. What about the college graduates, will they get incentives to sharpen their skills to compete with students from around the world.”

While Harry’s criticism is based on his concern that the “tax bill will adversely be impacting R&D”, small business owners, especially in the research-intensive industries and technology companies, welcomed the measure of the bill of permanently reinstating the deduction for domestic R&E expenses paid or incurred in 2025 and beyond.

Notably, retroactive application of this proposal is likely to deliver game-changing relief to the many small business taxpayers that endured the adverse impacts of mandatory R&E amortization in recent years.

Speaking with Fox News, CPA and small business owner Gene Marks said the big winners of the bill “are small businesses.”

“I think that's going to have an enormous impact on the growth of businesses in this country,” Marks said.

“There are certain tax provisions in this bill, investing in capital equipment, spending on research and development, [increasing] the exemption for estate taxes, [and] they have all been made permanent, which means that small businesses can make long-term decisions about investing in their businesses, selling their businesses, or passing it on to new generations knowing that the laws aren't going to change.”

Win for Some, Loss for Others

James Richards, co-founder and Chief Executive of climate fintech start-up Evergrow, was quoted as having said that the bill will “crush” small businesses by removing federal incentives for small business owners to install on-site solar after 2027.

Small businesses make up nearly half of the US economy, and Congress’s own survey data found a third of them count energy as one of their top three expenses.

Meanwhile, Jay Timmons, President and CEO of the National Association of Manufacturers, was quoted as having said that the bill making permanent the tax breaks from President Trump's first term, was a “huge step”.

“In 2017, I think we had a great victory for manufacturing in America, but it was a temporary victory. We knew all along that, especially for small manufacturers, who are so critical to the supply chain for manufacturers, larger manufacturers, we really only had a victory that would last until 2025,” Jay was quoted as having said.

He said expanding provisions on company expenses and itemizations as envisaged by the bill was also a bold move.

Manufacturers in particular are supportive of the bill. Companies could fully and immediately deduct the cost of new manufacturing plants. It also has incentives for producing semiconductors, the NAM President and CEO further said.

Jay said a rather less appreciated takeaway of the bill was that the corporate rate didn't change.

“Even just a few weeks ago, there were folks talking about, well, maybe we should put a few more points on the board on the corporate side. That's not a good message for manufacturers who we would like to invest in their new plants and equipment here in this country,” Mr. Timmons added.

The joy among manufacturers comes from the fact that the bill would make significant changes to how the US tax code treats the construction of new manufacturing facilities.

Businesses will be allowed to fully and immediately deduct the cost of building new manufacturing facilities. This temporary provision is retroactive to January 19, 2025 and continues for construction that begins before January 1, 2029.

The National Federation of Independent Business, the leading small business lobbying group, praised the legislation for making permanent a special deduction for the owners of certain pass-through entities, who pay businesses taxes on their individual tax returns.

That deduction, which applies to small businesses and partnerships formed by lawyers, doctors and investors, would get increased in the House version of the bill from 20 percent to 23 percent. The Senate bill kept it at 20 percent.

More Takeaways

The current law has a provision that small business taxpayers may elect under section 179 of the Internal Revenue Code to deduct (or expense) up to $1 million of the cost of qualifying property, instead of recovering such costs through depreciation deductions.

Section 179 expensing is intended to lower the cost of capital for tangible property used in a trade or business, allowing small businesses to invest in more equipment and employ more workers. It also eliminates depreciation recordkeeping requirements with respect to expensed property.

To increase both the value of these benefits to small businesses and the number of eligible taxpayers that may receive them, the bill will permanently increase both the amount allowed to be expensed under section 179 and the amount of the phase-out threshold.

Companies could fully and immediately deduct the cost of new manufacturing plants. The bill also has incentives for producing semiconductors.

Inputs from Saqib Malik

Editing by David Ryder