House Republicans are taking the first steps toward restoring tax provisions important to manufacturers, according to The Wall Street Journal (subscription).
What’s happening: Legislators are working to get a bill through the House Ways and Means Committee, potentially as soon as this month, though it’s unlikely to ever reach President Biden’s desk. Instead, this effort might ultimately lead to bipartisan negotiations later this year.
What’s in it: The bill hasn’t been released yet, but we do know something about tax writers’ intentions.
- The package would “reverse three business-tax increases that took effect over the past few years, aides said. Those changes limited the deductions companies could claim for interest, research costs and capital expenses.”
- Democrats may be willing to negotiate, especially about reinstating immediate expensing for R&D, undoing a 2022 tax change that has forced companies to deduct R&D costs over a period of years and made innovation more costly.
NAM at work: The NAM has been leading the charge to restore immediate R&D expensing, to enable manufacturers to continue financing growth and make permanent a key incentive for capital equipment purchases.
What we’re saying: As NAM Managing Vice President of Tax and Domestic Economic Policy wrote this week to the House Small Business Subcommittee on Economic Growth, Tax and Capital Access:
- “Several harmful tax changes have gone into effect recently that make it more costly to perform research, buy machinery and finance capital investments. If not reversed, these policies will hurt manufacturers’ ability to innovate, create jobs in the United States, invest in their communities and effectively compete in the global economy.”
As part of the NAM’s advocacy campaign, the NAM recently released the Full Expensing Action Center. This action center, which is in addition to the existing R&D and interest deductibility action centers, features a tool enabling manufacturers to send customized messages directly to Congress.