A little over one month since President Trump signed the One Big Beautiful Bill Act (OBBB) into law, the legislation continues to generate headlines, with leftist activists flooding town halls during the August Congressional recess and a new letter from the Congressional Budget Office providing additional fiscal impact estimates. Despite the continued anger from paid protesters, the law was a major achievement and will pay dividends for individuals and independent businesses for years to come.

Major Tax Relief

The Tax Cuts and Jobs Act, the major tax reform passed during President Trump’s first term, led to expanded corporate investment and boosted economic growth through a mix of tax changes — most importantly, big cuts to corporate and individual income tax rates. While the corporate changes were made permanent at the time, the budget process necessitated that the individual rate cuts be temporary, expiring in 2025. As a result, individuals and the vast majority of independent businesses were facing a huge tax increase if the provisions were not renewed. Fortunately, the OBBB extended the TCJA’s rate cuts, preventing the harmful tax increase and keeping $2.2 trillion in the pockets of everyday Americans and independent businesses.

Almost equally important for independent businesses, the OBBB permanently extends the 20 percent tax deduction for pass-through income for small businesses. This key driver of economic growth will mean 1.2 million additional jobs on average annually and $75 billion in additional GDP each year over the next ten years. Both impacts are expected to grow well beyond that in future decades.

Other positive changes will simplify tax and reporting requirements for independent businesses and expand the immediate expensing rules for equipment and machinery.

Reining in Government Giveaways

Medicaid spending totaled almost $900 billion in FY 2023, with the federal government paying $614 billion of that and the states covering the remainder. Expenditures have increased significantly in recent years, and the federal government (taxpayers, actually) pays a growing share of the bills. Because this program, like other government entitlement programs, has ballooned in cost, OBBB implemented major reforms to rein in spending and save taxpayers from abuse of the system.

The reforms to Medicaid include establishing work requirements for recipients, requiring states to conduct regular eligibility checks, reducing duplicate enrollment with CHIP, and taking steps to limit fraud and overpayment in the system. The work requirements alone are expected to save $326 billion over the next decade, but all told, the Medicaid reforms will save $911 billion of taxpayers’ money.

Work Left to Do

While the tax and Medicaid provisions are crucial victories for taxpayers and independent businesses, the overall fiscal impact of the bill means there’s a lot of work left to do to reduce deficit spending and get our debt under control. With government it’s almost always a spending problem, not a revenue problem. While cuts will be necessary and would have been ideal, if policymakers had taken some steps to reduce the growth in spending over the past two decades, revenue growth would have left the U.S. in a much stronger fiscal scenario. As a result, OBBB contributes to the debt problem by not making significant cuts to slush funds, welfare via the tax code, and other sacred cows in the federal budget.

Among the most wasteful of the bill’s provisions were tens of billions of dollars of increased agricultural subsidies, keeping wasteful energy subsidies from Joe Biden’s inaptly named Inflation Reduction Act rather than repealing them immediately, and increasing the cap on the State and Local Tax (SALT) deduction.

FROM: Citizens for Free Enterprise Action
TO: Interested Parties
RE: Arizona 2025 Legislative Session Analysis

The Arizona Legislature adjourned its 2025 regular session on June 27. At 165 days the session was five days longer than last year’s session, but still significantly shorter than the record long session in 2023. Overall, legislators considered more than 1,850 different bills and resolutions. Of the 439 measures passed by the legislature, Democratic Governor Katie Hobbs signed 265 and vetoed 174.

With divided government, and narrow partisan splits in both legislative chambers, any major legislation affecting free enterprise was unlikely to pass this session. Overall, the final result generally favored free enterprise, as the most harmful pieces of legislation died in the legislature and a handful of positive bills made it through.

Importantly, the number of positive bills that became law was severely limited by Governor Hobbs’ pursuit of a new veto record. Governor Hobbs’ more head scratching and anti-free enterprise vetoes this session included stopping bills to combat the threat posed to Arizona by the Chinese Communist Party (HB 2542, SB 1027, SB 1109); prevent fraud and abuse in public benefits programs (HB 2121, HB 2122, HB 2449, HB 2450, SB 1071); and anti-corruption measures to bring transparency and prevent public funds from being used to influence elections (HB 2895, SB 1036, SB 1612).

KEY TAKEWAYS

We applaud state policymakers for largely protecting free enterprise by balancing the budget without major tax increases while also preserving school choice programs in the state. Two other major positives from the legislative session are worth highlighting:

1. The most promising new law from Arizona’s legislative session protected private property and Arizona businesses from interference by out-of-state unions. This crucial change will protect Arizona from turning into California by preventing the abuse of the zoning process against the development of new housing when a company builds new headquarters in the state. This change means more jobs in Arizona, because companies will no longer have to worry about out-of-state unions trying to hold up the zoning process when a company won’t promise union jobs.
2. Although several standalone bills that would have increased Arizona’s personal property tax exemption for independent businesses failed, lawmakers successfully included the increase in the final budget that was signed into law. Thanks to the budget change, the tax exemption nearly doubled to $500,000.  There are thousands of independent businesses across Arizona, and at a time when these businesses face significant uncertainty this tax change will provide some much-needed relief.

HARMFUL LEGISLATION DEFEATED

Nearly as important as the positive bills that passed the legislature were the numerous harmful bills that didn’t make it into law. Harmful bills this session would have raised taxes, imposed costly new regulations on independent businesses, dismantled school choice, repealed right to work, or generally rolled back free enterprise in Arizona.

1. There were a number of radical environmental bills proposed this session, including costly new permitting requirements and bills that would enable frivolous private lawsuits. However, the most radical bill that would have had an immediate negative impact on Arizonans and independent businesses would have banned shopping bags at check out. While some cities that have taken these steps focused on only plastic bags, this bill was so extreme it would have banned paper bags too or required stores to charge customers for each bag they needed.
2. The most extreme and harmful bill of the session was introduced by Senator Analise Ortiz to impose a new single payer, socialized medicine system in Arizona. The proposal’s government-run health insurance scheme would be overseen by a board of government bureaucrats and impose billions in new tax increases on Arizonans. Fortunately for Arizonans, the radical bill never made it out of a committee.

Bottom Line: While free enterprise victories were hard to come by, the 2025 legislative session was generally positive for free enterprise, as the most harmful bills were stopped and several beneficial bills for independent businesses made it through the divided government.

FROM: Citizens for Free Enterprise Action
TO: Interested Parties
RE: Georgia 2025 Legislative Session Analysis

The Georgia General Assembly wrapped up its 2025 legislative session in April after considering more than 1,300 different bills. On July 1, many of the new laws passed by the General Assembly and signed by Governor Kemp took effect. In total, Governor Kemp signed 363 new laws, bringing victories on key issues as state policymakers embraced free enterprise values. Although a handful of bills that would have benefited Georgians did not make it through final passage due to various time and political constraints, the work done this session was extremely positive for Georgians. Importantly, legislators stood in the way of many harmful bills that would have had significant harm for the state.

KEY TAKEWAYS
We applaud Georgia legislators for taking an important step to combat the influence of the Chinese Communist Party by bringing more transparency to CCP funding given to universities. Two other major issues are worth highlighting in detail.

1. For the second straight session, Governor Kemp and legislative leaders prioritized tax relief for Georgians. New changes lowered the overall tax burden in the state, allowing Georgians to keep more of their hard-earned money every year. This session’s tax reform further cut the rate for individual tax payers, saving them more than $880 million next year, and will deliver more than $1 billion in additional refunds to taxpayers due to a budget surplus. Almost half of the surplus refunds were delivered by July 1, and the rest are expected to be processed soon.
2. The legislative session brought much-needed regulatory relief for Georgians who operate independent, home-based food businesses. The new law authorizes the production and sale of certain homemade foods, creates licensing, inspection and disclosure requirements, and prohibits local regulations. This was a bipartisan effort after a similar bill failed to make it through last session.

HARMFUL LEGISLATION DEFEATED
Nearly as important as the positive bills that passed the legislature were the numerous harmful bills that legislative leaders successfully stopped. Among the many harmful bills this session, some of the worst would have instituted socialist price controls that limit consumer choice and imposed harmful new requirements on thriving businesses in Georgia.

1. The most notable bill was a late introduction that would have imposed soviet-style price controls on prescription drugs in the state. Under the bill, a government board of five bureaucrats would have the power to set the price of any prescription drug sold in the state. The bill would impose other restrictions as well that, combined with the price controls, would lead to drug shortages and higher costs for Georgians. Rather than unleashing the innovative spirit of Georgia’s entrepreneurs, this bill would recycle socialist policies that have failed time and time again.
2. Another harmful bill imposed costly new red tape for employers in one of Georgia’s fastest growing industries. The so-called Warehouse Worker Protection Act would have added numerous restrictions on how employers interact with their employees. The bill would have been an end run around the state’s right to work protections for employees by imposing union-style restrictions in businesses without union employees.

Bottom Line: Positive legislation passed by the General Assembly and signed by Governor Kemp, including major tax reform and relief for home-based businesses, means Georgians can rest easy knowing that free enterprise has been preserved for another legislative session.