Wealthy Americans and business investors are among the big winners in House Republicans’ draft tax legislation while targets of President Donald Trump’s ire such as immigrants and elite universities were hammered. 

The tax plan is likely to undergo significant changes as it winds through the House and then the Senate. But the committees’ drafts released this week have set up initial goalposts. 

Here’s who’s winning and losing so far in the tax fight.

Winners

Multimillionaires

The rich would dodge a tax increase and gain the ability to pass more wealth on to their heirs in the bill approved early Wednesday by the House’s tax committee.

House Republicans omitted a proposal the Trump administration floated to raise the income tax rate from 37% to 39.6% on people with very high incomes. Instead, wealthy families get another tax break: the estate tax exemption will rise to $15 million for individuals and $30 million for married couples next year, and rise with inflation afterward. Moreover, their Trump tax cuts would become permanent.

Small business owners

The bill increases the pass-through business tax deduction from 20% to 23% and expands the definition of who can qualify. The deduction is available to owners of sole proprietorships, LLCs and partnerships.

Private equity

The carried interest tax break benefiting private equity, venture capital and real estate partnerships would survive again, despite the president’s push to eliminate it. Private equity also won an expanded interest expensing tax break.

Domestic car dealers

Up to $10,000 a year in loan interest for U.S.-made cars would be tax deductible through 2028, a boon to auto dealers looking to close sales. But the break phases out slowly for individuals with more than $100,000 in income and couples with more than $200,000. This new break will cost an estimated $57 billion in lost tax revenue.

Manufacturers

The bill revives several favorable tax rules for businesses, including bonus depreciation for the cost of production upgrades and a research and development tax break, winning the endorsement of the National Association of Manufacturers. Those breaks, however, would also be temporary. 

Elderly and tipped workers

In a nod to some of Trump’s populist campaign promises, taxpayers aged 65 and older would get a larger standard deduction, while tips and overtime pay would be exempted from income taxes. The provisions included limits to shrink their cost and would expire after 2028.

Parents

The child tax credit would increase from $2,000 to $2,500 through 2028. Newly minted parents could open up new “MAGA” investment accounts for their babies seeded with $1,000 from the government.

Corporations

Other tax increases that had been considered that would have hit big business, such as an increase in the stock buyback tax or a limit on the state and local deduction for corporations, were mostly rejected.

Defense contractors

The package boosts defense spending by $150 billion, with much of the funding going to new weapons systems made by major contractors.

Losers

Low-Income Americans

Some of the cost for the tax bill would be defrayed through cuts to Medicaid health coverage and food stamps, both of which benefit low-income Americans. House Republicans are seeking to impose work requirements on able-bodied Medicaid recipients up to 64 years old and beneficiaries would have to pick up more costs. 

The GOP also has proposed cuts to the nation’s largest anti-hunger program, the Supplemental Nutrition Assistance Program. That includes expanding current work requirements to cover more beneficiaries. Beginning in 2028, states also would be required to pay a portion of food benefit costs, which are now fully paid by the federal government.

Residents of high-tax states

Lawmakers representing high-tax states such as New York, New Jersey and California pressed to increase a limit on the deduction for state and local taxes first imposed to help pay for Trump’s 2017 tax law. But House Republicans’ plan to raise the limit to $30,000 — up from the current $10,000 — fell far short of demands.

Negotiations are still underway and the disappointed lawmakers have plenty of leverage. House Speaker Mike Johnson said a SALT deal is likely Wednesday. House Ways and Means Chairman Jason Smith has criticized the demands for an even bigger SALT deduction, saying that a $30,000 cap covers more than 90% of the constituents in high-tax districts.

The limit would expire entirely at the end of the year without new legislation and because of the small Republican majority just a few lawmakers from high-tax states could block the House bill if they withhold their votes, as they have threatened to do.

Renewable energy

Clean energy industries would be hit by the Republican plan, which would roll back many provisions of former President Joe Biden’s landmark climate law. 

A tax credit for solar panels and other clean energy systems would be phased out, as would investment and production tax credits for wind, solar and other clean electricity production. Tax credits for the production of nuclear power and hydrogen production also would be phased out. 

Electric vehicle makers

Tesla Inc., General Motors Co. and other electric vehicle makers would be hit by elimination of a consumer tax credit of up to $7,500 for the purchase of electric vehicles. 

The GOP proposal also ends tax credits for used and commercial electric vehicles. 

Elite universities

Add tax bills to the escalating battle the Trump administration and Republicans are waging against elite universities such as Harvard and Columbia.

Private colleges and universities with at least 500 students and endowments exceeding $2 million per student would pay a rate of 21% on net investment income, up from the current tax of 1.4%. That includes Harvard, Yale, Stanford, Princeton and MIT.

But the plan won’t only impact the wealthiest private colleges. Colleges with endowments over $750,000 to $1.25 million per pupil will pay a 7% tax, while colleges with endowments over $1.25 million per student but below $2 million would pay 14%. Religious institutions are exempted.

Private foundations

Private foundations also would face an escalating tax based on their size: 2.78% for private foundations with assets between $50 million and $250 million, 5% for entities with assets between $250 million and $5 billion; and 10% for foundations with assets of at least $5 billion, such as the Gates Foundation, a longtime target for Republicans.

Immigrants

Several provisions would raise taxes on immigrants. That includes a new 5% tax on transfers of money to foreign countries, known as remittances. Many immigrants in the U.S. send money to relatives in their countries of origin. U.S. citizens could apply for credits to offset that cost.

The proposal also would restrict some immigrants’ access to tax credits for health coverage premiums. The change would prevent immigrants granted asylum or temporary protected status from accessing those credits.

Artificial intelligence-based automation is lowering the curtain on the accounting profession’s long and fruitful spreadsheet era — just as the spreadsheet ended the era of hand-calculated ledgers.

This time is different, though. The fundamental labor of tax and audit has forever changed. AI can, in a flash, accomplish what litanies of VLOOKUPs, pivot tables, conditional formulas and various other spreadsheet techniques take hours to do. By altering the basic currency of accounting work, AI has changed the skill sets and personal characteristics tied to success in the accounting profession. That, in turn, has changed this field’s recruiting game — and, more broadly, the talent- and resource-management games. 

AI’s role in recruiting grows by the day, and along two main fronts. The first is boosting HR efficiency by reducing the cost, effort and time required to recruit through the sourcing, screening and evaluation processes. The second is increasing the quality and fit of incoming team members through better accuracy and conversion rates in hiring.

AI is revolutionizing recruiting in tax and audit

A dizzying number of AI-infused solutions exist along both fronts. These include standalone systems as well as recruiting-specific modules offered by major ERP vendors. In addition, ERPs are increasingly exploiting cloud integration to enable the smooth incorporation of what once would have been standalone systems. SAP alone has more than 100 such partners, including Apli, HireEZ, Impress.ai, JobAI-lysis, Magneto, Paradox, Pulsifi, SeekOut, SniperAI and TurboHire, to name just a few.

Some focus narrowly; some cover lots of territory. AI helps screen resumes. Old-school applicant-tracking systems have been doing that for years, but AI is enabling far more precision, to the benefit of companies and candidates alike. More impressively, AI conducts automated, conversational interactions (via web chat, SMS, WhatsApp, email and more) to assess both hard skills (yes, Excel still counts) and soft skills such as emotional intelligence, leadership traits, reliability, customer orientation and teamwork. All that feeds into better candidate profiles while saving HR staff a ton of time.

AI enables tailoring of hiring criteria based on past successful hires. It can run psychometric tests and rank candidates on dozens of variables. It can tap into talent pools through public profiles, professional-service organizations, job boards, university databases and other sources, locally and globally. It can scour for passive candidates and predict candidate interest and availability. AI can determine a prospect’s market value, then use predictive hiring analytics to estimate the likelihood of offer acceptance. It can conduct video interviews and assess communication style and tone, verbal and nonverbal cues, and the consistency of responses, then transcribe and summarize the results.

AI in service delivery changes what accounting firms are recruiting for

AI’s ability to help recruiters tease out soft skills and personal qualities is particularly important to today’s accounting profession. The managing partner of a Big Four firm once joked that an extroverted accountant was one who, while conversing, looked at your shoes instead of his own. That won’t cut it anymore. This field needs people with interpersonal skills and an ability to understand the business significance of the data AI has already spreadsheet-jockeyed. They must compellingly present and explain their conclusions to others in the organization. Much earlier in their careers, accountants must now be able to assess the state of the race rather than just spur on a single horse. 

That has implications far beyond AI in recruiting. Where we’re headed is the AI-facilitated integration of recruiting, resource management and talent management to help spreadsheet sophisticates learn the bigger-picture business and build and refine their strategic-thinking and interpersonal skills — and at the same time provide a new generation of accountants hired on evolved criteria with the deeper audit-and-tax skills they must harness for the firm’s and their own success.

AI-powered resource management has become a major focus

Given the need to bring in strong performers in a specialized field in which retirements are outpacing new entrants, accounting firms are moving on all three fronts. Notably, they’re turning to ERP-integrated AI resource-management and talent-management systems such as ProFinda and Whoz. These take into account skills, rates, availability, capacity and other factors to determine the optimal mix of internal and external workforces, including a growing number of gig-work and contract accountants. Central to these systems are staff retention and reskilling, both which go hand in hand with the new recruiting paradigm. 

The sunset of the spreadsheet era has profound implications for accounting firms. AI-powered recruiting solutions are now indispensable in finding, assessing and bringing in talent poised to thrive in reshaped tax and audit ecosystems. But AI recruiting is not enough. It’s going to take combinations of integrated AI systems to ensure staff can grow quickly into more strategic roles even as firms profitably maintain high levels of client service. It takes a village to raise a child, the saying goes. These days, it takes an AI village to develop an accountant.

Business management solutions provider Zoho announced that its customer relationship manager, previously only for sales teams, has been modified and enhanced with AI to become, now, the CRM for Everyone solution. This is because, according to Raju Vegesna, chief evangelist with Zoho, more people deal with customers than just the sales team. 

“Before, CRM was relegated to salespeople, but a lot of folks deal with the customer, so how do you get access to CRM for all these groups? This is where CRM for everyone comes in. Your legal team, market team, service team, can now access the CRM,” he said. 

However, it is not very useful for, say, the legal team to only be able to interact with the system in the context of sales. This in mind, the redesigned solution now sports extensive customization abilities that let users tailor the CRM to their specific needs. A big part of this is the ability to create new modules, aided by Zoho’s embedded AI Zia. 

“In this case, I am a legal person. I like what I see, but I want to create a module for managing my contracts. How do I do it? You see Zia? I can say ‘create a contracts module where I can upload contracts and link them to deals.’ Simple. Zia now analyzes the context of your business and the context of the modules you have access to, as well as other modules that it can link to, and based on that suggests what [components should belong in the module, such as vendor, contract ID, contract value, contract type, etcetera.] I can choose to create it and that creates a module. Zia makes module creation easy,” said Vegesna. 

He added it is a similar process for creating custom workflows: the user tells the AI what they want (e.g. be notified by email when a deal is closed with a value greater than $30,000), and the AI then creates the trigger events in the appropriate modules then sets up the workflow schedule itself, then acts as an agent to execute them. 

The solution also supports report creation, using the Zia AI to create it based on the user’s permissions. As they can see the AI’s build process in real time, the user also has the ability to interrupt Zia to make additional changes, then ask Zia to resume after the override. It also supports a feature called “Image to Canvas” which allows users to upload an image and have the AI incorporate it into the CRM as a design element. For example, if an HR team wants to create a list view that matches employee ID cards, it can upload an ID card image, and Zia will generate a custom Canvas view automatically.

“Multiple people in an organization need access to customer information, yet historically, CRMs have been relegated to only sales teams,” said Mani Vembu, CEO of Zoho. “As we democratize CRM with the launch of CRM for Everyone, we also need to build in capabilities that make it easy for anyone to build and extend CRM with simple prompts, without having to be an expert in the system. This is where Zia’s advanced capabilities come in. Now, anyone can create capabilities, workflows, or reports in CRM with a simple prompt. They can also make their CRM look the way they want with Zia’s image to design capabilities.”

As of today, CRM For Everyone is generally available to global businesses. Unless explicitly stated otherwise, AI capabilities are included in license costs for customers. Under CRM For Everyone, Team user (non-sales CRM users) licenses start at $9 per user per month on all paid editions of Zoho CRM.