Implications of Failing to Enact the One Big Beautiful Law
The One Big Beautiful Bill (OBBB), a legislative proposal aimed at maintaining economic growth and a blue-collar boom, is currently focused on the economic implications of preserving the 2017 tax cuts. If the OBBB is not passed and the 2017 tax cuts are not preserved, several potential ramifications could occur.
Firstly, the expiration of trillions in tax cuts would lead to a significant increase in tax liabilities for many taxpayers starting in 2026. This could negatively impact disposable income, business investment, and overall economic growth.
Secondly, the failure to preserve the 2017 tax cuts could potentially lead to an economic downturn. The OBBB is aimed at preventing this by partially funding tax cuts through modifications to Medicaid, SNAP, and student loan programs. Without OBBB, these programs would not experience those changes, potentially preserving their current funding structures but missing opportunities for federal budget adjustments.
The OBBB also introduces changes related to remuneration limits and employee benefits. Without its passage, these new policies—such as modifications affecting compensation deduction limits for executives or expanded tax provisions—would not take effect. Additionally, OBBB includes new tax provisions like "no tax on tips" and tax relief on overtime pay. These benefits would disappear if the bill is not passed, increasing tax burdens on certain earners.
It's important to note that the OBBB does not mention any specific investments or initiatives to boost the economy beyond preserving the 2017 tax cuts. However, the bill could potentially spur investment, boost families' take-home pay, and revitalize struggling communities.
In sum, not passing OBBB means reverting to pre-2017 tax law rates, resulting in higher taxes for individuals and businesses, loss of new tax benefits, and a smaller federal deficit but potentially less economic stimulus. The bill’s enactment involves adding about $3.4 trillion in federal deficits over 10 years, so avoiding it could reduce deficits but at the cost of increased taxes and lost new provisions created by OBBB.
[1] Joint Committee on Taxation. (2017). General Explanation of the Conference Agreement for H.R. 1, The Tax Cuts and Jobs Act. [2] Congressional Budget Office. (2017). The Budgetary Effects of the Conference Agreement for H.R. 1, The Tax Cuts and Jobs Act. [3] Internal Revenue Service. (2018). Instructions for Form 1040, U.S. Individual Income Tax Return. [4] Congressional Research Service. (2017). The Tax Cuts and Jobs Act: Provisions Affecting Employee Benefits. [5] Congressional Budget Office. (2018). The Budgetary Effects of the Conference Agreement for H.R. 1, The Tax Cuts and Jobs Act: An Update.
- The failure to pass the One Big Beautiful Bill (OBBB) could lead to a reversion to pre-2017 tax laws, resulting in increased taxes for individuals and businesses, the loss of new tax benefits, and potentially less economic stimulus.
- In terms of policy-and-legislation, passing OBBB would introduce changes related to compensation limits, employee benefits, and new tax provisions, such as 'no tax on tips' and tax relief on overtime pay. Without OBBB, these changes would not take effect, leading to an increase in tax burdens for certain earners.
