The 'Big Beautiful Bill' Lie

Why This Tax Monstrosity Is the Ugliest in IRS History

In my many decades as a tax expert-cum-libertarian advocate critiquing government overreach, I’ve encountered my share of poorly conceived legislation, but the so-called "One Big Beautiful Bill Act" (OBBBA), HR-1, passed by the House on May 22, 2025, takes the cake as the ugliest, most inefficient, and economically destructive tax bill in modern memory. If you thought Biden’s so-called Inflation Reduction Act was an insult to your intelligence, with its counterintuitive name and bloated spending, the Republicans have now topped it in the theater of legislative absurdity.

Far from “beautiful,” this bill is a bloated, corrupt monstrosity —an embarrassment that should leave every legislator and lobbyist involved hanging their heads in shame. Rather than assembling this Frankenstein bill, Congress should have simply extended the 2017 Tax Cuts and Jobs Act.

The Tax Foundation outlines the hallmarks of good tax policy: simplicity, transparency, neutrality, and stability. By contrast, the OBBBA is a masterclass in how not to write tax law—unstable, complex, biased, and opaque.

A closer look reveals the truth: this bill is packed with graft, corporate handouts, and bureaucratic landmines dressed up as reform.

Individual Provisions: A Parade of Bad Tax Policy

1. Populist Handouts: Cronyism Masquerading as Tax Cuts

The OBBBA’s ‘tax cuts’ are vote-buying handouts that spit in the face of fairness. This bill is littered with provisions that sound like relief but are really subsidies for favored groups, with no basis in sound tax policy. The state and local tax (SALT) deduction cap rises to $40,000, phasing down to $10,000 above $500,000 (joint) or $250,000 (single) income. The child tax credit jumps to $2,500 through 2028. Tip income and overtime pay are deductible through 2028 for certain workers, and auto loan interest (up to $10,000) is deductible for U.S.-assembled cars, with phase-outs. These are partisan ploys, not tax reform, designed to pander to narrow groups while ballooning the deficit.

Why They’re Bad Tax Policy:

• SALT Hike: The SALT deduction has no place in a fair tax code. It’s an unearned windfall for high-tax states like New York and California, rewarding their reckless spending while penalizing frugal states. It’s partisan, inequitable, and lacks any economic justification. The Tax Foundation estimates its $60 billion annual cost fuels deficits without growth.

• Child Tax Credit: This isn’t a tax cut—it’s a welfare handout for low-income families with children, disguised as tax policy. It belongs in a spending program, not the IRS code. The CBO projects its $100 billion cost by 2028 adds to unaffordable debt with no pro-growth impact.

• Tips and Overtime Deductions: Exempting tips and overtime pay for select workers is unfair and inequitable, favoring narrow groups like waiters and shift workers over others. It’s pure cronyism, not tax relief, and hikes the deficit with no economic benefit. Defining “customarily tipped” or “premium overtime” will also bury the IRS in audits.

• Auto Loan Interest: This deduction is a blatant subsidy for U.S. automakers, offering no growth benefits. It’s cronyism that picks winners (car companies) while losers (taxpayers) foot the bill. Phase-outs add layers of complexity, making tax season a nightmare.

These provisions aren’t about fairness—they’re pandering giveaways that congest the tax code and fuel unaffordable deficits.

2. Bureaucratic Nightmares: Tax Season as a Kafka Novel

This section’s provisions are a masterclass in bad tax policy, creating complexity and inequity that defy common sense. The bill permanently limits casualty and wagering losses, eliminates miscellaneous deductions (like expenses to earn income), scraps moving expenses and alimony deductions, and replaces the Pease limitation with a 35-cents-on-the- dollar cap on itemized deductions. The alternative minimum tax (AMT) exemption and phaseout thresholds are made permanent, and non-corporate loss limits are tightened. These rules are so nonsensical they’d make a tax lawyer weep.

Why They’re Bad Tax Policy:

• Income-Earning Deductions: Eliminating deductions for costs of earning income—like fees on interest- bearing accounts or portfolio expenses—is economic sabotage. If you have a taxable income settlement of $100K but have to pay your lawyer $35K to get it, you still have to pay taxes on the $100K, almost eliminating any benefit from that settlement. These deductions have a fundamental basis in fairness, unlike the OBBBA’s social engineering handouts. Scrapping them punishes productivity and equity.

• Alimony and Moving Expenses: These deductions, also eliminated, support equitable tax policy. Alimony deductions level the playing field for divorced taxpayers, while moving expense deductions ease job- related relocations. Their removal is mean-spirited and lacks any rational basis, unlike pandering credits like SALT.

• AMT: The alternative minimum tax makes no logical sense and has nothing to do with its original purpose of ensuring the wealthy pay their fair share. Not one person in the tax legislative process can explain what it is or what purpose it could possibly serve. Its permanence is a travesty, costing taxpayers and Congress hundreds of millions annually in compliance and education.

• Pease Replacement: Replacing the Pease limitation with a 35-cents-on-the-dollar cap swaps one stupid calculation for another equally stupid one, achieving the same negative effects—penalizing high earners with complex math for no economic gain.

• Loss Limits: Continuing and tightening non-corporate loss limits hits small businesses hardest, stifling growth for political spite. Not allowing losses in full to offset gains has no basis in logic or fairness. In addition, its complexity adds compliance costs for taxpayers and Congress untold millions in accounting fees and lost GDP.

These provisions prioritize politics over common sense, turning tax season into a bureaucratic quagmire.

3. Corporate Cronyism: Big Business Wins, Small Firms Lose

Business and international provisions favor big corporations while crushing smaller players. The bill tweaks the Section 199A pass-through deduction (up to 23%) with new limits on wages, capital, and specified services. It closes SALT cap workarounds for businesses, phases out green energy credits (e.g., clean electricity, hydrogen), and expands a clean fuel credit. Provisions like 100% bonus depreciation, R&D expensing and expensing for capital expenditures are critical, pro-growth policies. But the fact that some of them have been made temporary seriously detracts from those provisions’ benefits. Permanent rates for global intangible low-taxed income (GILTI), foreign-derived intangible income (FDII), and base erosion and anti-abuse tax (BEAT) round out the mess.

Why They’re Bad Tax Policy:

• Section 199A Tweaks: 199A deductions are a necessary provision. But changing rates and eligibility for the pass-through deduction destabilizes planning for small businesses, which employ 60% of U.S. workers, per the SBA. These tweaks—on wages, capital, and services—add complexity for no gain, hurting more than they help just to give politicians bragging rights.

• SALT Workarounds: SALT workarounds represent an attempt to give businesses a SALT deduction for the taxes on their business income. Closing the workarounds misses the point that SALT deductions shouldn’t exist at all.

• Green Credits: Phasing out some green credits (e.g., clean electricity) while keeping or adding others (e.g., clean fuel) is partisan nonsense. All credits should be scrapped immediately, not sunsetted for political points. These are industry subsidies that add complexity and cost taxpayers hundreds of millions in compliance. To the extent that Congress feels it necessary to provide subsidies, they should it through a direct spending program, not through the tax code.

• GILTI/FDII/BEAT: These international taxes are impossible for small firms and individuals to navigate, requiring armies of accountants that only multinationals can afford. They crush smaller players while letting big corporations skate, costing GDP through compliance burdens.

These provisions show Congress’s incompetence, favoring connected corporations over small businesses and taxpayers.

4. TCJA Permanence: The One Redeeming Feature, Sabotaged by Gimmicks

The OBBBA makes several 2017 Tax Cuts and Jobs Act (TCJA) provisions permanent, including tax rates, brackets, standard deductions, personal exemptions, and the $750,000 home mortgage interest limit. But temporary boosts—like a $2,000 standard deduction hike ($1,500 for head of household, $1,000 for others) and a $4,000 senior deduction through 2028—undermine the effort. Permanence is a nod to stability, but sunsets and tweaks turn it into a political stunt.

Why It’s Bad Tax Policy:

• Temporary boosts destabilize planning, leaving taxpayers guessing post-2028.

• The CBO estimates these short-term hikes add $150 billion to the deficit by 2028, with no real growth.

• Sunsets force businesses and families to navigate uncertainty, contradicting the TCJA’s simplicity.

If Congress had made the TCJA permanent with minor revisions, it could’ve been a win. Instead, these gimmicks betray the promise of stable tax policy.

The Bigger Picture: A Betrayal of Liberty

A good tax code should empower people to plan their financial lives without leaping through hoops or decoding a maze of contradictions. Instead, the OBBBA shreds those principles—clogging the code with tweaks so absurd they cost more to enforce than they yield and turning the IRS into an overstretched referee in a rigged game. Any of its “tax cuts” are little more than subsidies for politically favored industries—window-dressing for corporate welfare. Cringeworthy doesn’t begin to cover it.

The OBBBA is a case study in how to ruin a tax code— riddled with arbitrary cutoffs, convoluted restrictions, and short-term gimmicks that undermine simplicity. The Congressional Budget Office estimates the bill will add $3.7 trillion to the deficit over the next decade, excluding interest. But that doesn't take into account that certain provisions (e.g.: immediate expensing of fixed asset purchasing and R&D) are pro-growth, fueling more business activity that will actually raise more taxes. The gold standard in tax analysis, the Tax Foundation, accounts for dynamic scoring and finds that the bill’s tax cuts will spur economic growth, $2 trillion in additional revenue from increased business activity. This reduces the net deficit impact to $1.7 trillion. But even though 1.7 trillion is not as bad as the CBO says, it is still a significant increase to the deficit, piling unaffordable debt onto future generations while clogging the tax code with partisan nonsense.

Let’s be crystal clear: the hikes to the standard deduction and child tax credits aren’t tax cuts—they’re thinly veiled handouts, shifting the cost to future generations and adding more complexity to an already broken system.

Such credits follow the same cynical logic: they are not tax cuts in any meaningful sense—they are government handouts masquerading as tax relief. These credits have nothing to do with actual tax policy and everything to do with political patronage. Congress dresses them up as tax incentives, but they are pure spending programs, laundered through the IRS to hide their true nature. If lawmakers were honest, they’d record them as direct expenditures—which is what they are.

Washington’s obsession with using the tax code as a playground for social engineering and corporate favoritism is disgraceful. They exploit the tax code to funnel subsidies to favored industries, transforming the IRS into an ATM for climate and other lobbyists. The OBBBA is not just a bad bill —it’s a betrayal of every principle of sound taxation. While the legislation must pass, Congress should scrap this monstrosity version and start over—with a tax code that honors individual liberty, not one that fattens the friends of power.