Institutional investors insights us policy watch

U.S. Policy Watch: Key Changes and Potential Impacts By Nancy Pilotte, CAIA 10/09/2026

Federal policy This tracker explains Because many changes can what has changed, policies are still being influence everything what it means and implemented or from taxes and health who may be affected. challenged, the care costs to potential impacts employment, may continue to consumer prices and evolve. investment markets.

Taxes The One Big Beautiful Bill Act, signed into law on July 4, 2025, made many provisions affecting individual and business taxes permanent or revised.

Key elements of the law’s individual tax provisions include both permanent and temporary changes.

The law permanently extends the individual tax rates and larger standard deduction established under the 2017 Tax Cuts and Jobs Act. It also permanently increases the maximum tax credit for each child under age 17 by $200 to $2,200 beginning in 2025, with inflation adjustments starting in 2026.

Temporary provisions include deductions for qualified tips and interest on qualifying vehicle loans through 2028, subject to eligibility requirements, annual limits and income phaseouts. The law also raises the state and local tax deduction cap from $10,000 to $40,000 for 2025. The cap increases by 1% annually through 2029, then returns to $10,000 in 2030, subject to income-based limits.

By extending the individual tax rates and larger standard deduction, the law prevents scheduled tax increases for many households.

Eligible workers may owe less federal income tax on qualified tip income through 2028.

The higher SALT deduction cap may reduce federal income taxes for some households that itemize deductions.

The vehicle-loan interest deduction may lower federal income taxes for eligible buyers of qualifying vehicles through 2028.

The larger child tax credit may reduce federal income taxes for eligible families.

The individual tax provisions are projected to reduce federal revenue and increase deficits by about $4.2 trillion through 2034, before accounting for other tax and spending changes in the law.

The regular federal corporate income tax rate remains 21%, unchanged by the law. The law’s key corporate tax change permanently restores 100% first-year depreciation for qualifying business property acquired after January 19, 2025.