The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, marks a significant shift in U.S. corporate taxation, offering the largest set of tax reductions for businesses since the 2017 Tax Cuts and Jobs Act (TCJA).
With a primary goal of promoting greater domestic investment in tangible production within the United States, the OBBBA aims to reshape the corporate landscape by adjusting tax liabilities across various industries.
This comprehensive tax reform particularly favors corporations in manufacturing, information, and mining, which will see the most substantial reductions in tax obligations calculated for 2026.
Analysis using the Tax Foundation’s Taxes and Growth Model indicates that C corporations overall can expect a 0.6 percent decrease in tax liability as a proportion of their value added from 2023, translating to approximately $137.2 billion saved in 2026 alone.
A detailed breakdown reveals that over the 2025-2035 budget window, manufacturers will reap the most significant financial benefits, with an estimated $422.6 billion in tax reductions.
Closely following, the information sector is projected to gain $136.0 billion, reflecting the OBBBA’s focus on incentivizing specific industries toward domestic production and investment.
The OBBBA introduces permanent revisions to depreciation rules, reestablishing and solidifying 100 percent bonus depreciation for tangible assets.
Additionally, it eliminates the five-year amortization period for domestic research and development (R&D) expenses, favoring immediate expensing, which could spur innovation and competitiveness.
Further incentives come from implementing more favorable limits on interest deductions, alongside a novel 100 percent deduction for qualifying structures used in tangible production, available for buildings operational by 2031.
While the major overhaul benefits numerous C corporations, the impacts vary. For instance, industries in construction, administrative services, and accommodation are projected to experience only marginal changes in tax liability over the next decade.
Despite construction’s close ties to tangible production, its limited gains stand in contrast to the substantial tax relief experienced by the manufacturing sector.
It’s important to note that while reductions in overall tax liability are evident, they do not solely define the effectiveness of the OBBBA’s impact on corporate investment incentives.
The nuances of tax liabilities reflect changes in average tax rates rather than the more critical marginal tax rates that influence investment decisions.
Nonetheless, the OBBBA’s provisions, particularly those allowing for extensive expensing of capital investments, are expected to lower marginal effective tax rates.
This reduction is crucial because it can encourage long-term investment and spur economic growth, highlighting the OBBBA’s potential effect on the corporate investment landscape.
Ultimately, the data illustrates a clear trend: corporations involved in tangible production are positioned as primary beneficiaries of the OBBBA’s tax reforms, indicating a strategic pivot in U.S. tax policy.
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image source from：taxfoundation
