What the Federal Tax Cuts and Jobs Act 2.0 Means for Oregonians

The U.S. Congress passed the Tax Cuts and Jobs Act 2.0, commonly known as the Big Beautiful Bill (BBL), this summer aimed at revitalizing the American economy. The bill extended tax cuts enacted a decade ago and added other tax relief on tip income, social security, and overtime earnings.

It’s hard to appreciate something that didn’t happen, but the new law avoided raising taxes on every taxpayer to the tune of more than $4 trillion. TheBBL also tightened eligibility standards on a number of programs to address fraud and abuse. The Oregon legislature has never seen matching federal dollars it didn’t try and leverage to the maximum. Oregon stands to lose several hundred million dollars from the Federal government in 2026.

The Oregon Governor and her Democratic party super majority is planning to disconnect the Oregon tax code from the federal tax laws to deny Oregonians the provisions of the BBL that eliminated taxes on tips, social security, and overtime pay.

Fortunately, it is too late in 2025 for the legislature to take our tax cuts for 2025 away. However, in January 2026, the legislature will convene to protect public employee paychecks and job security and cost all of us a lot of money.

The 2025 legislative session expired in July with the super majority Democrats failing to pass a $15 billion transportation bill. The Republicans offered an alternative bill with no tax increase, but the Democrats voted it down. The governor called a special session on Friday of the Labor Day holiday weekend, but the absence of one Democratic lawmaker prevented passage of a scaled down $4.3 billion transportation bill for more than a month. The bill increases a number of fees, and includes a 15% increase in the gas tax and a doubling of your transit payroll tax.

Voters have an opportunity to repeal this tax by signing a petition to put the issue on the ballot. Signatures must be gathered in 90 days from bill passage, and the governor is reducing the number of days to collect signatures by delaying signing the bill into law. We encourage voters to sign the upcoming petition.