The state of business taxation has felt increasingly chaotic in recent years. That trend accelerated in 2025 as Congress considers many tax changes, tariffs and global trade evolve, and efforts to reshape the federal government take hold. That environment can easily lead to paralysis, with business leaders waiting for more information before undertaking planning actions. However, proactive planning can be a crucial tool that helps businesses to find stability within a challenging environment.

When considering future tax planning, two factors are fundamental to expectations about the state of play and the actions that might be taken along the way.

We’re in a period of continuous change

Electoral trends have created an environment where recent presidential election cycles led to unified government with narrow majorities. That was the experience over the past three cycles and will likely persist into the future. In recent years, unified government opportunities translated quickly into enacted legislation implementing the majority party’s stated policy objectives. Those changes to the Tax Code often involved temporary provisions due to the legislative procedures utilized in Congress.

For example, the Tax Cuts and Jobs Act (TCJA), enacted in 2017, provided broad-based tax cuts, but most provisions were scheduled to sunset at the end of 2025. Specific rules, such as required capitalization of research expenditures, the limitation on business interest expense deductions, and bonus depreciation all included earlier changes that limited deductions beginning in 2022. The looming expiration of the TCJA was an important issue during the 2024 campaign cycle and has spurred the legislative process during 2025.

The Tax Code has also been modified in significant ways in response to economic challenges. The congressional response to the COVID-19 pandemic illustrates this point. Specifically, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), leveraged the Tax Code to drive economic support to businesses in the form of employee retention tax credits, increased interest expense deductions, and net operating loss carryback rules, among others. When economic turbulence occurs, the Tax Code is often viewed as an expedient means of providing support to businesses and individuals.

What can a business do to plan for continually shifting tax rules?

• Maximize the current tax rules based on the assumption that changes will occur in the future.
• Implement a process for systematic tax planning on a quarterly basis, which takes existing rules, scheduled changes (e.g., expiration dates), and likely congressional action into account.
• Engage with industry organizations and members of Congress on tax policy matters to stay better informed and understand what changes may be coming

Debt and deficit concerns will translate into tax policy

Balancing the benefits and burdens of the Tax Code is an age-old challenge. The focus on this topic has become magnified in recent years, as the net costs of tax changes are factored into budget deficits and increasing national debt. Fiscal concerns can drive cuts to spending programs, including recent efforts to decrease the scale of the federal government. Alternatively, net increases in taxes may be attractive to legislators when seeking to reduce debt.

These concerns have been integrated into tax proposals in various ways over the past decade. Concerns about the overall cost of the TCJA resulted in the imposition of a limitation on state and local tax deductions (the SALT cap), in addition to other cost management features. Furthermore, the legislative process during the Biden administration included proposals to increase taxes on capital gains for high-income taxpayers, modify carried interest rules, and impose a form of wealth tax. More recently, President Trump has signaled an openness to increasing the top tax bracket on ordinary income to offset the cost of tax cuts in the One, Big, Beautiful Bill.

What does this all mean?

• Businesses should expect that fiscal concerns will translate into some form of higher taxes in the future.
• However, the details will matter, as tax increases are typically not implemented on a uniform basis.
• To plan for the future, businesses should utilize modeling to better understand the impact of potential tax increases. This is especially important for shining a spotlight on the true pain points that would alter decision making.

Process and planning reduces uncertainty

While a future involving continuous change and shifting tax rules may seem challenging, it doesn’t need to be daunting. The key to finding stability? Regular and systematic tax planning that models changes, identifies the pain points, and evaluates available options for your business.