House Republicans plan to help pay for an extension of President Donald Trump’s massive tax cuts by clawing back unused funds from scores of programs and grants in his predecessor’s signature climate law. 

Billions of dollars allocated under former President Joe Biden’s Inflation Reduction Act would be rescinded under a portion of Trump’s sweeping tax package released by a key House committee on Sunday. That includes funds channeled to the Energy Department’s $400 billion green bank loan program, and to industrial facilities to help lower their greenhouse gas emissions, according to a GOP summary of the House energy and commerce committee’s portion of the bill. 

“The legislation would reverse the most reckless parts of the engorged climate spending in the misnamed Inflation Reduction Act, returning $6.5 billion in unspent funds,” Representative Brett Guthrie, a Kentucky Republican who chairs the committee, wrote in the Wall Street Journal on Sunday.

The Republican plan also calls for revoking unused funds from more than a dozen divisions within the Energy Department. The Office of Minority Economic Impact, which helps minorities compete for agency grants and contracts, would see nearly $2.8 billion pulled, while the Office of Energy Efficiency and Renewable Energy, which has funded technological research in projects like plug-in electric trucks, would lose $402 million. Unspent EPA grants for electric trucks, environmental justice, reducing air pollution at schools, and other programs would also be rescinded.

The bill, which is almost certain to be changed by the Senate if it passes the House, would also repeal auto pollution and fuel economy standards, which were finalized by the Biden administration last year, and delay by 10 years the collection of a fee on methane emissions from oil and gas producers.

The legislation would also include $2 billion to help shore up the nation’s depleted Strategic Petroleum Reserve and mandate the Energy Department automatically approve applications to export liquefied natural gas to those that pay a $1 million fee. 

The proposal was met with alarm from climate groups like Evergreen Action, which said the plan would make deep cuts to vital clean energy and pollution-fighting programs.

“Republicans are once again siding with corporate polluters and billionaires over working families,” Executive Director Lena Moffitt said in a statement. “This is all so they can offer tax giveaways to the rich and prop up the profits of the fossil fuel industry.”

Ultimately, House Republicans are aiming for a total of $2 trillion in spending reductions paired with a $4.5 trillion in reduced revenue from tax cuts.

Public accounting is a vibrant and strong profession and also a business.

The following is some data I abstracted from the Accounting Today March 2025 listing of the Top 100 Firms with my take on what they indicate.

The totals are revealing, but I wanted to see how the smaller firms are faring against the larger firms. When I did my analysis, I decided there are three groupings that make sense in providing a better picture of the Top 100. I broke the firms into the Big Four, which are a totally different world than the others and whose numbers distort the results for the Top 100. I then distinguished the next group of practices with over $1 billion in revenues last year, and there were 12 such firms. The balance is made up of the remaining 84 firms. While the firms in each group varied greatly, I believe the information shown provides interesting information that can be used to better measure the firm’s performance and back up some of the conclusions I reached.

The revenues of the Big Four were 69% and the next group 24% of the total. This left the remaining 84 firms with 12% of the total. The partners in the Big Four represented 5% of their total personnel, while for the next 12 it was about 8.7% and the remaining 84 it was 10.7%. This indicates that the 12 firms with over a billion in revenues had a partner-to-staff ratio much closer to smaller 84 than the larger Big Four. I also came up with the revenues per partner in my chart, and there were gigantic differences in the three groups, but with the 12 much closer to the smaller group. This makes sense with the much smaller numbers of partners in the Big Four. I don’t think the number of offices is a significant measure, except the larger firms would have more offices than the smaller ones. The ground rules for the rankings and details are in the March 2025 Accounting Today report.

The breakout of the total employees was fully proportionate with the revenues for all groups, indicating a relationship between the number of employees and the revenues. While the revenue per partner was significantly greater for the Big Four, the revenue per employee was not considerably different. The Big Four was a little over $7,000 per employee greater than the group of 12, and that group was about 10% greater than the remaining 84. I view this as a pricing, cost and efficiency measure. Considering the much greater size of the top two groups, I do not see the smaller firms doing badly in this regard. 

One reason why this may be so could be that the larger practices have a higher pay scale with greater benefits, more costly layers of management and review, and the pressure of containing fees on the more traditional services of auditing and tax compliance. Also, in smaller firms, many of the client relationship partners perform higher-level tax and audit planning and review in place of spending a great deal of their time managing the client relationships. I know many smaller firms are more focused on providing added high-value advisory service that the larger firms treat as added product lines with the same built-in infrastructure costs they have for the audit and tax compliance. 

All three groups perform the same general percentage of A&A work while the Big Four perform, as a percentage of their total services, much lower tax work. I added the MAS, CAS and other services together as different firms report these differently. In doing so, the Big Four run away with this, but the smaller grouping is outperforming the Next 12 group. It would seem that the group of 12 would be mimicking the Big Four in the nontraditional services, but instead they are behind the smaller group. Since private equity is entering the playing field, they might see opportunities in the growth of advisory services, but it may be that the existing partner group is performing to the best of their ability and perhaps that opportunity does not exist. I know partners and senior staff in many firms in the 96, and the really successful partners are supercharged with focused experience in niche areas, making them “go-to” people commanding top fees and a flood of referrals. These people are really great and, because they are with smaller practices, they generate a higher proportion of the revenue for their firms. The Big Four compete with large advisory firms and that squeezes fees, while the “experts” in the smaller practices literally have no serious competition regarding their pricing.

The numbers I came up with present a lot of questions. I’ve alluded to some of them, and I am sure readers will have more. That is a benefit of analyzing aggregate data and breaking it down. I have been doing this my entire career and have developed great relationships with my clients.

A further observation about the Top 100 numbers is that the average revenues of the bottom five (No. 96 to 100) are $64.5 million and the total employees are 312. I do not want to pass any judgment with these numbers but wish to point out that while these are substantial accounting practices, they are relatively small businesses. I averaged the five firms since the 100th on the list appears to be an outlier with much fewer employees. The Accounting Today report includes a listing of 45 “Beyond the Top 100: Firms to Watch.” The last firm on that list has revenues of $38 million with 170 employees, an even smaller business. It is believed that public accounting comprises about 45,000 firms, with about a couple hundred being large businesses. I see this as an opportunity for smaller firms to grow while limiting opportunities for larger firms to grow organically.

I hope you find the above interesting and have followed the process I used to look beyond the chart and come up with helpful observations. This process can be easily applied to your business clients.

Do not hesitate to contact me at emendlowitz@withum.com with your practice management questions or about engagements you might not be able to perform.

House Republicans are struggling to resolve key issues with President Donald Trump’s multitrillion-dollar tax package after weekend talks, including a change in the deduction cap for state and local taxes and a potential hike in the rate for high earners.

Key GOP-led committees dribbled out parts of their plan over the weekend, such as an increase in the maximum child tax credit to $2,500 and raising the estate tax exemption to $15 million. Those were items in an incomplete menu of proposals required to be released before Monday.

On the government savings side, the Energy and Commerce Committee proposed on Sunday a controversial work requirement system for Medicaid beneficiaries and potential cost-shifts to the states also tied to the insurance program for millions of poor and disabled Americans.

But that left some of the most politically tricky components unaddressed, until lawmakers return to the issues Monday. Trump wants to eliminate the carried-interest tax break used by venture capital and private equity fund managers and boost levies on executive compensation. He’s also endorsed upping the top income tax rate to 39.6% for individuals making $2.5 million or more and couples earning at least $5 million, though he’s retreated somewhat on pushing that proposal.

Perhaps the most politically fraught question is how much to raise the deduction for state and local taxes, which Trump capped at $10,000 in 2017 and members who represent high-tax states like New York, New Jersey and California have been longing to increase. It’s particularly challenging for Republicans in those states — some of whom want the limit lifted to $30,000 or even higher to answer demands of frustrated constituents. 

But the revenue that the lower cap currently generates is badly needed to pay for the tax cuts Trump wants to aim at his middle-class and working-class base, such as eliminating taxes on tips and overtime.

Such details have hit a House GOP self-imposed deadline, however.

Speaker Mike Johnson and his lieutenants continue to eye Memorial Day, later this month, for final House passage of the overall bill. And this week has been set for key remaining committees to finalize their parts, so that an overall bill can be cobbled together and advanced.

If they miss that deadline, as analysts consider likely, another more difficult deadline looms.

Republicans are planning to use the tax bill to advance a $5 trillion debt-limit increase, and Treasury Secretary Scott Bessent told lawmakers Friday that his department’s ability to use special accounting maneuvers to stay within that ceiling limit could be exhausted in August. He urged them to act by mid-July. Still, he said in a Bloomberg Television interview Monday that “the tax bill is moving along very well — better than I could have imagined.”

If the GOP cannot get the tax package done in time, they could pass a standalone bill on their own, though that might be politically challenging if done without spending cuts. Otherwise they could work with Democrats, but they would likely use their leverage to try negotiating for spending increases, as they have in the past.

Starting Tuesday, key hearings kick off at House committees including the tax-writing Ways and Means panel. Also up: the Energy and Commerce Committee, which oversees health-care spending. A draft plan for Medicaid changes fails to make the largest-scale measures that the Freedom Caucus has pushed — risking blowback for GOP leaders soon from conservatives.

Under the current draft, at least 13.7 million people would lose health insurance by 2034, also curtails some Affordable Care Act coverage, according to analysis from the non-partisan Congressional Budget Office.

The GOP’s razor-thin 220-213 majority has made party unity vital. But that’s a tall order when, for example, fiscally conservative Republicans from low-tax states oppose a boost to the so-called SALT cap, seeing it as a boon to the rich in largely Democratic states. 

A decision on SALT and other issues could be announced after a meeting between party leaders and some of these lawmakers Monday morning. Also awaiting decisions are Trump’s hopes to end taxes on tips, overtime and Social Security benefits, as well as tax credits for auto loans and for building domestic factories. The last two were designed to blunt the sticker shock of Trump’s tariffs regime.