Growing and Preserving Innovation in America Act of 2025

1) What happened: On February 6, 2025, Representative Feenstra (R-IA) introduced HR1062, the 'Growing and Preserving Innovation in America Act of 2025.' The bill amends Section 250 of the Internal Revenue Code to repeal the scheduled reduction in the FDII and GILTI deductions. Under current law, the FDII deduction drops from 37.5% to 21.875% after 2025, and the GILTI deduction drops from 50% to 37.5%. This bill makes the higher rates permanent. Status: referred to the House Ways and Means Committee — early legislative stage with 7 cosponsors. 2) The money trail: This is a tax expenditure — it does not authorize or appropriate spending. Instead, it permanently forgoes approximately $500B-$700B in tax revenue over 10 years (CBO estimate for similar provisions in prior Congresses). The mechanism is a direct reduction in effective corporate tax rates for foreign IP income. No contracts, grants, or direct payments; the benefit flows automatically to any US corporation with qualifying foreign-derived intangible income. 3) Structural winners: The primary beneficiaries are US multinationals with large foreign patent and trademark portfolios. Big Pharma (JNJ, PFE, MRK, ABBV), tech platforms (MSFT, AAPL, GOOGL, AMZN, NVDA, ADBE, CRM, ORCL), and consumer staple/licensing companies (KO, PG, PEP, MDLZ) all see direct after-tax income increases. The bill is neutral-to-negative for purely domestic companies (retailers, utilities, regional banks) and foreign-domiciled multinationals, who do not benefit from the US tax provisions. 4) Real market data context: As of April 30, 2026, the tech-heavy beneficiaries show mixed recent performance. MSFT ($402.04, -5.32% 7-day) declined sharply from $424.46 on April 29. AAPL ($270.92, flat 7-day) and GOOGL ($370.30, +7.52% 7-day) are diverging — GOOGL hit a new 52-week high near $377. AMZN ($260.88, -1.18% 7-day) and NVDA ($202.25, -2.89% 7-day) have pulled back from recent peaks. The broad correction in tech names on April 30 (MSFT -5.3% in a single day) suggests the market is pricing in macro headwinds, not the bill's specific impact. JNJ ($230.20, +1.19% 7-day) and PG ($146.62, -1.05% 7-day) are stable, while PFE ($26.66, -1.26% 7-day) remains weak. KO ($78.76, +2.78% 7-day) is firm. 5) Timeline: The bill is at the earliest stage — referred to committee with no hearings scheduled. The 119th Congress runs through January 2027. Passage probability is moderate (~35-45%) in a divided government; tax extenders often pass as part of year-end omnibus packages. With the scheduled rate cut arriving January 2026, the market may begin pricing passage odds into affected stocks by late 2025 if committee action accelerates.