A congressional proposal to limit interest expensing would be damaging for manufacturers, according to a new study.
The numbers: A recent analysis prepared by EY’s Quantitative Economics and Statistics group found that the proposed interest expense limitations would cost about:
- 623,000 jobs,
- $31.6 billion in annual employee compensation, and
- $60.1 billion in annual GDP.
What we’re saying: “Manufacturers are already facing incredible economic headwinds due to increased input costs, labor shortages and strong inflationary pressures,” said NAM VP of Tax and Domestic Economic Policy Chris Netram.
- “This analysis shows that limiting tax deductions for interest on business loans disproportionately harm manufacturers at a perilous time – costing hundreds of thousands of jobs and billions of dollars in economic growth at a time when our industry is trying to drive our nation’s recovery.”
What Congress should do: The NAM encourages Congress to consider proposals that build on the successes of the Tax Cuts and Jobs Act rather than approving tax increases that threaten manufacturers’ post-pandemic recovery.
NAM in the news: Politico’s Morning Tax newsletter highlighted the new study.