Call Congress Now To Tell Lawmakers To Extend Tax Key Policies

U.S. lawmakers return to Washington, D.C. next week to begin the second session of the 118th Congress. That makes now the perfect time to call congressional staff to ask that their bosses extend certain tax provisions that are important to manufacturers and metals industry companies.

Specifically, the U.S. House and Senate must:

• Ensure the tax code supports innovation by allowing for immediate research and development (R&D) expensing. The private sector accounts for more than 75 percent of total R&D spending, with small businesses alone accounting for approximately $90 billion in all private sector R&D investments. With wages and salaries comprising approximately 75 percent of R&D spending, allowing R&D amortization is, first and foremost, a jobs issue.
• Enabling businesses to finance growth by setting a pro-growth interest deductibility standard.Before January 1, 2022, businesses’ interest expense deductions were limited by section 163(j) to 30 percent of their earnings before interest, tax, depreciation, and amortization. Interest deductions are now limited to 30 percent of earnings before interest and tax. By excluding depreciation and amortization, the stricter standard acts as a tax on investment, making it more expensive for capital-intensive companies throughout the supply chain to finance job-creating growth.
• Making permanent a key incentive for capital equipment purchases. From 2017 through 2022, the federal tax code allowed for a 100 percent deduction for the purchase of equipment and machinery in the tax year purchased. That provision began to phase out this year and will completely disappear by 2027. Congress enacted full expensing to spur investments and ensure that the United States is well-positioned to attract capital in a competitive global marketplace. It must reverse the phaseout and restore the 100 percent deduction.

MSCI urges its member company employees and leaders to make their voices heard on these important tax issues.

The National Association of Manufacturers (NAM) has launched online action centers that provide information about each of these tax policies. These portals also allow individuals to send letters to the representatives in Congress asking them to reduce the tax burden on manufacturing companies. Click here to learn more about the R&D tax credit, here for interest deductibility, and here for full expensing.

As a reminder, late fall, MSCI joined NAM and more than 1,300 other organizations in sending a letter to House and Senate leaders asking them to schedule votes on legislation that would extend these provisions. That letter is available here.