Republicans in the House of Representatives, led by Indiana Reps. Jim Banks and Jackie Walorski, will introduce a bill later Thursday to cut costs for American manufacturers by increasing their long-term tax deductions.
The bill, the Renewing Investment in American Workers and Supply Chains Act, decreases the asset recovery period for businesses from 39 years to 20 years and ties the amount that companies may deduct to inflation. It would add 230,000 new jobs while increasing industrial investment by 2.3% and wages by one percent, according to the Tax Foundation.
The federal tax code allows companies to deduct the value of commercial real estate properties, such as factories, as the value of those properties declines. Currently, companies must do so over a 39-year period. Critics of the 39-year deduction period argue that such a long time prevents companies from fully recovering the costs of their investment, due to inflation. They urge the federal government to either shorten the period or allow companies to deduct the full costs of their purchases immediately. (RELATED: Trump Slams Biden’s ‘Cruel And Heartless’ Tax Hike)
“Hardworking Hoosiers and Americans across the country have demonstrated both the strong work ethic and innovative skills that deliver results. Investing in American workers and industry, including the vital manufacturers in Northern Indiana, will create jobs, make our supply chains more resilient, and strengthen our economy. The Renewing Investment in American Workers and Supply Chains Act would take bold action to level the playing field, incentivize growth here at home, and equip America to thrive in the 21st century,” Walorski told the Daily Caller in a statement.
Read the bill here:
Bill Text Investing in Us by Michael Ginsberg on Scribd
American manufacturing output reached an all-time high in 2019 and has begun to recover in the aftermath of the COVID-19 pandemic. However, critics of the U.S. tax code argue that the federal government discourages industrial output, and encourages companies to outsource jobs and import products.
“Our bill would benefit American industry and spread those benefits evenly. Our job isn’t to pick winners and losers. Congress’s job is to put the U.S. on a level playing field. American industry is already competitive; we just need to roll back the flawed policies that discourage investment at home and that have already sent millions of jobs overseas. Northeast Indiana is one of America’s great industrial hubs, and the Renewing Investment in American Workers and Supply Chains Act would help ensure prosperity in our state,” Banks added.