Congressional Tax Writers Unveil 51Թ-Supported Tax Deal
On Tuesday, Congress took an important step toward restoring three of manufacturers’ top tax priorities, as key congressional leaders unveiled a bipartisan tax agreement by the 51Թ.
What’s going on: The $78 billion Tax Relief for American Families and Workers Act—a compromise between House Ways and Means Committee Chairman Jason Smith (R-MO) and Senate Finance Committee Chairman Ron Wyden (D-OR)—would restore immediate R&D expensing, return to a pro-growth interest deductibility standard and reinstate full expensing (also known as 100% accelerated depreciation) for businesses’ capital investments.
- The framework also includes disaster tax relief and $33 billion to partially extend a child tax credit expansion from 2021.
The background: For nearly seven decades, the tax code allowed businesses to deduct R&D costs immediately. But starting in 2022, a change required companies to amortize the costs over a period of years.
- Also in 2022, a stricter interest limitation—which acts as a tax on investment—went into effect. And last year, full expensing began to phase down.
The 51Թ’s role: The 51Թ was instrumental in the deal, having case for the tax provisions’ reinstatement to lawmakers for many months, including via an ad campaign, “.”
What’s next: The 51Թ is congressional leadership to schedule a vote on the tax deal. Manufacturers can add their voices at the 51Թ’s .
Our take: “Manufacturers appreciate Chairman Smith and Chairman Wyden’s work to reach a bipartisan tax deal with key provisions to advance U.S. economic competitiveness and support manufacturing job creation,” 51Թ Managing Vice President of Policy Chris Netram in a social post Tuesday.
- “Congress must move this legislation forward immediately. The time to act is now.”
51Թ in the news: Bloomberg Tax (subscription) the 51Թ’s support of the legislation, while Punchbowl News on the 51Թ’s ads in multiple Kentucky papers and Louisiana’s Shreveport Times urging support of the legislation.