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House Committee Advances Trump Administration Tax Proposal

| General Government Relations

The Trump administration’s proposed tax package advanced out of the House Budget Committee on May 18 in a narrow 17–16 vote, clearing the way for possible floor action as soon as Wednesday of this week. The bill, which includes extensions of the 2017 Tax Cuts and Jobs Act (TCJA) and new provisions focused on working households and small businesses, is a central part of the administration’s broader economic agenda.
Key Provisions Relevant to the Marine Manufacturing Industry:
  • 100% expensing for new and modernized manufacturing facilities – this provision supports capital investment for marine manufacturers, though this provision is temporary and sunsets after 4 years.
  • Expanded deductions for depreciation, interest, and R%D expenses – while this is helpful in the near term, full R&D expensing is not permanent, expiring after 4 to 5 years, depending on the provision, requiring longer-term advocacy.
  • Permanent 23% pass-through deduction (Section 1998A) for small businesses – which includes many marine manufacturers and suppliers

Key Provisions in the Current Bill:

  • Permanent extension of the 2017 tax cuts for individuals and businesses
  • Elimination of federal income tax on tips and some overtime pay
  • New tax deductions for seniors and expanded standard deductions for individuals
  • ·Retention of the current 37% top individual income tax rate
  • Elimination of several clean energy tax credits enacted under the previous administration
Other Notable Elements:
  • No changes to the corporate tax rate or the carried interest loophole
  • Provisions addressing estate and gift taxes, and expanded access to 529 and health savings accounts
  • Ongoing discussions around adjusting the state and local tax (SALT) deduction cap; one proposal would raise the cap to $62,000 for individuals
  • A related provision under review would limit state-level regulation of artificial intelligence systems for 10 years
The bill also includes spending reductions to offset some of the potential cost, including proposed changes to entitlement programs such as Medicaid, but by law is prevented from making changes to Social Security. Treasury Secretary Scott Bessent has stated the bill is intended to drive long-term economic growth and support job creation, while critics continue to raise concerns about its projected impact on the federal deficit.
According to the Council of Economic Advisers (CEA), the bill could increase average family take-home pay by between $7,800 and $13,300 and raise wages by $6,100 to $11,600, depending on household type and income. Other projections estimate a potential federal revenue shortfall of up to $5 trillion over the next decade, prompting concerns about national debt levels.
Next steps:
  • A full House vote is expected before the Memorial Day recess, with a vote as early at Wednesday of this week.
  • If passed, the bill could move directly to the Senate or be met with a separate Senate proposal. If that is the case, differences between the two version s would be resolved in a conference committee, where differences can be resolved between the two chambers before final passage.

NMMA continues to monitor the bill’s progress and advocates for pro-growth policies that support small businesses, strengthen domestic manufacturing and expand consumer purchasing power. The proposed tax provisions, particularly those benefiting working families and small manufacturers, align with our goals to foster a stable economic environment for the recreational boating industry. For questions or to provide input, please contact Clay Crabtree, Senior Director of Public Policy, at [email protected].