Winners and Losers in the $80 Billion Bipartisan Tax Plan

The business community and developers of affordable housing emerged as some of the biggest winners of the bipartisan tax proposal, while New York and California Republicans, Venmo and its users, and island territories lost big.

Senate Finance Chair Ron Wyden (D-Ore.) and House Ways and Means Chair Jason Smith (R-Mo.) released a nearly $80 billion package that revives some expired business tax breaks and also boosts the child tax credit. The plan also includes an expansion of the low-income housing tax credit, a Taiwan tax agreement, and a tax reporting requirement change for independent contractors.

Some lawmakers, industries, and taxpayers made out better than others. The losers, though, pose obstacles to passage as tax writers continue to garner support to pass the legislation before tax filing season begins Jan. 29.

Winners

Business Community: Business Roundtable, the National Association of Manufacturers, and the US Chamber of Commerce wanted Congress to revive the trio of tax breaks that expired in the last few years: full bonus depreciation, immediate deductions for domestic research and development costs, and the allowance of amortization, depreciation, or depletion when calculating the limit on business interest deductions.

Not all companies will benefit equally. Limiting the tax break to domestic R&D is a disappointment to industries with large foreign activities like pharmaceuticals.

Business Roundtable, which represents companies that include 3M and Amazon Inc., praised the plan Tuesday, calling for quick action from Congress.

Affordable Housing Supporters: Provisions to expand the low-income housing tax credit have drawn a large swath of bipartisan support in recent years, and that paid off. Supporters got a 12.5% increase in the amount of credits states can allocate, which helps states fund more developments.

The legislation would help build more than 200,000 new affordable housing units, Wyden said in a Tuesday news release. Other winners from this measure include developers of the projects, investors, and banks and funds that put together the deals.

Low-Income Families: While Democrats didn’t get everything they were hoping for in a child tax credit expansion, the proposal would reach more children than the current credit.

In the first year, about 80% of children in low-income families who don’t get the credit now would benefit, according to the Center for Budget and Policy Priorities. Some Democrats wanted to see the package include the more generous child tax credit from the 2021 American Rescue Plan Act, and it’s unclear if those Democrats will still support this legislation without that.

Taiwanese Companies: Taiwanese businesses and residents would see some double-taxation relief under the legislation, which may help boost a broader push for Taiwanese investment in semiconductor manufacturing and research in the US. More plants could spring up in the US as a result of any investment.

Leading chipmaker Taiwan Semiconductor Manufacturing Co. and other top Taiwanese officials have said Taiwanese companies are holding back investment because of the tax regime. The bill also would authorize the president to negotiate a tax agreement, which would fall short of a formal treaty.

Losers

The SALT Caucus: High-tax state lawmakers have demanded a provision to raise the $10,000 state-and-local tax deduction cap since the limit was enacted by Republicans in 2017. Democrats pushed to get a hike during negotiations for President Joe Biden’s Build Back Better agenda, and New York and California Republicans stalled a GOP tax bill last year because it lacked a SALT provision.

Some of those Republicans, too, have said they won’t vote for any tax package that doesn’t include a SALT provision. This package, yet again, includes no SALT relief. Legislation raising the SALT cap, though, also faces hurdles as many Republicans oppose the measure over its cost and other Democrats say it’s a giveaway to the rich.

The next step for SALT lawmakers may be coming together behind an amendment, if they get the chance.

Venmo, eBay, and platform users: The legislation did include a 1099 tax reporting change, but for the 1099-NEC and 1099-MISC forms. The tax deal would raise the requirements for those forms from $600 to $1,000, meaning businesses would be required to send the forms to independent contractors to whom they made over $1,000 in payments.

A different 1099 change caught more attention last year, though. Because of a delay from the Internal Revenue Service, taxpayers in the 2026 filing season will receive forms if they have over $600 in business transactions on platforms like Venmo, eBay, and Etsy. For the 2025 filing season, taxpayers who have over $5,000 in business transactions will receive forms.

Companies still hope there’s time for lawmakers to include the 1099-K change. Arshi Siddiqui, who lobbies on behalf of a group of platforms, said the group continues to push for a fix as the tax package moves through the legislative process.

Island Territories: Tax benefits for Puerto Rico, the Virgin Islands, and American Samoa failed to make the cut.

Puerto Rico and the Virgin Islands were looking for a temporary increase in the cap for rum excise tax revenue to be transferred to their coffers, known as the rum cover-over. Since the expiration, the payment has reverted to $10.50 per gallon, a figure set in 1984.

American Samoa relies on a tax incentive for tuna canneries to conduct business in the territory, which has also expired. The break helps offset the cost of doing business in American Samoa, though several tuna canneries left the island in the past decade. Starkist Co. is the last one operating. Del. Amata Coleman Radewagen (R) of American Samoa, the island’s congressional representative, has said the island might not recover financially if Starkist were to leave.

—With assistance from Chris Cioffi.