Trump megabill includes benefits for domestic investment, but no corporate rate cut

As a 2024 presidential candidate, Donald Trump promised to reduce the corporate tax rate from 21% — the rate set by Trump's 2017 tax law — to 15% for companies that make their products in America. His signature tax legislation, which he signed July 4, doesn't do that.

The law provides benefits for businesses. Four that align with his promise's goals in distinguishing between domestic and overseas investments are:

• Permanently restoring immediate expensing — rather than phased amortization — of expenditures for domestic research and development. In addition, small businesses with gross receipts of $31 million or less can retroactively receive credit for immediate expensing on their tax filings in 2022, 2023 and 2024. Larger companies can accelerate their remaining deductions over one or two years.

• Temporarily expanding the types of expenditures that can qualify for immediate expensing to include domestic manufacturing facilities, including agricultural and chemical production. Construction must begin after Jan. 19, 2025, and before Jan. 1, 2029, and the property must be placed in service before Jan. 1, 2031. This expires in 2032.

• Permanently restoring a more favorable limit on the business interest deduction starting in 2025. Under the previous law, businesses can deduct interest they paid or accrued in a given tax year, but only up to certain limits. The new law eases those limits.

• Permanently restoring immediate and full expensing of certain assets for property acquired after Jan. 20, 2025.

Although these provisions are beneficial to U.S. corporations, they do not amount to a cut in the corporate tax rate for domestic manufacturers. We rate this promise Stalled.

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