Lawmakers Agree To Tax Deal, But They Still Need To Hear From Us!

Early last week, U.S. Senate Finance Committee Chair Ron Wyden (D-Ore.) and U.S. House Ways and Means Chair Jason Smith (R-Mo.) announced a deal on a package of tax cuts that includes provisions for which the Metals Service Center Institute (MSCI) and partners like the National Association of Manufacturers (NAM) have been advocating.

Specifically, the $78 billion Tax Relief for American Families and Workers Act would restore immediate research and development expensing, return the United States to a pro-growth interest deductibility standard, and reinstate full expensing — also known as 100 percent accelerated depreciation — for businesses’ capital investments. The framework also includes tax relief for victims of natural disasters and $33 billion to partially extend a child tax credit expansion from 2021.

The new tax cuts would be “paid for” by eliminating the Employee Retention Tax Credit (ERTC). Originally designed to help small businesses impacted by pandemic-related lockdowns, as Connecting the Dots has reported, the program has suffered from rampant fraud. When the ERTC was originally created, the Congressional Budget Office (CBO) projected it would cost taxpayers $55 billion. As of July 2023, the Internal Revenue Service had given out an estimated $230 billion and counting,

As The Hill noted, while the House Ways and Means Committee approved the legislation on Friday, January 19 on an overwhelmingly bipartisan 40-3 vote, an action that moves the bill on the chamber floor for a vote, the final outcome of this battle is not certain. Metals industry leaders and employees should continue to call their members of Congress and their U.S. senators to ask that they support the legislation.

NAM is operating online action centers that provide information about each of these tax policies. The portals also allow individuals to send letters to U.S. lawmakers asking them to approve these important priorities. Click here to learn more about the R&D tax credit, here for interest deductibility, and here for full expensing.

As a reminder, last 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.