In 2024, the Supreme Court upheld the foreign earnings tax, a one-time levy on Americans with shares in foreign companies, reinforcing a key part of the 2017 Tax Cuts and Jobs Act. This ruling, reported by CBS News, ensures revenue from multinational corporations but complicates compliance for smaller investors. The House-passed “One Big, Beautiful Bill Act” of May 22, 2025, now in Senate debate, adds further tax changes, including a remittance tax and no taxes on tips.
The foreign earnings tax targets offshore profits, aligning with anti-tax-avoidance efforts but increasing filing complexity. The IRS, hit by staff reductions of 11% in 2025, may struggle to provide guidance, per the Journal of Accountancy. The bill’s other provisions, like a tax deduction for American-made cars, a small business deduction increase, and a seniors deduction, add administrative burdens. The remittance tax affects Non-Resident Indians and others, while electric vehicle tax credits face phase-out.
Senate debate will address these complexities, with amendments likely to streamline enforcement. The bill’s $3.8 trillion deficit impact raises concerns, per the CBO, as tax policies reshape the economic landscape.
