U.S. Senators Roy Blunt (Mo.), Rob Portman (Ohio), James Lankford (Okla.), and James Inhofe (Okla.) announced that they have introduced the Permanently Preserving America’s Investment in Manufacturing Act of 2021. The bill would ensure that American manufacturers can continue to make large investments, hire workers, and produce goods in the United States.
“The strength of America’s economy has always been based on our ability to make things and grow things,” said Blunt. “We had the strongest economy we’d seen in decades before the pandemic, with a tax code that allowed companies to grow, reinvest, and create good-paying jobs. As we recover from the pandemic, it’s an especially important time to eliminate hurdles that could stand in the way of getting our economy back to full speed. This bill prevents a significant tax hike that would make it harder to open new factories, hire more workers, and produce more goods in America. I urge all of our colleagues to support the bill.”
“At a time when we are just beginning to recover from the pandemic – when many companies took on additional debt during this challenging time – limiting the ability of these businesses to deduct interest is the wrong policy,” said Portman. “We must do more to support American manufacturers that are investing in the United States and hiring workers here, and it is vital that we stop tax increases on our manufacturers from going into effect.
“Putting Americans first means that we must support jobs and domestic manufacturing staying in the United States—and that’s exactly what this bill does,” said Lankford. “This technical change to the US tax code will make a huge difference to protect good-paying jobs down the road. I look forward to working with my colleagues to ensure section 163(j) of the tax code continues to rely on Earnings Before Interest, Taxes, Depreciation, and Amortization to keep our investment, manufacturing, and jobs here at home.”
“U.S. manufacturers keep the machine we call America going in good times and trying times,” Inhofe said. “Pre-pandemic, our economy was booming thanks to our work with President Trump and the 2017 Tax Reform bill, allowing U.S. manufacturers to thrive and grow. America’s manufacturers have played a key role in battling this pandemic and this commonsense bill would help them keep jobs and business here as we continue to recover. I am glad to join Sen. Blunt in introducing the Permanently Preserving America’s Investment in Manufacturing Act of 2021 and urge my colleagues in the Senate to pass this legislation quickly.”
Generally, businesses may deduct interest as a business expense. The deduction is limited to 30% of earnings before interest, taxes, depreciation, and amortization. However, beginning in 2022, depreciation and amortization will be removed from this calculation, further limiting businesses’ ability to deduct their interest expenses. That change will discourage investment and increase costs for American job creators, especially our manufacturers and other capital-intensive businesses. The Permanently Preserving America’s Investment in Manufacturing Act prevents the change from taking effect.
The legislation has garnered widespread praise among the nation’s leading manufacturers and advocates for a competitive tax code.
“The ability to efficiently finance equipment and machinery purchases is critical to growing domestic manufacturing, particularly for the small and medium firms that form the backbone of America’s supply chain. The legislation introduced by Sens. Blunt, Portman, Lankford, and Inhofe will help ensure that pro-growth investments remain affordable for manufacturers in America.” – Chris Netram, Vice President of Tax & Domestic Economic Policy, National Association of Manufacturers
“The Chamber strongly supports the introduction of Sens. Blunt, Portman, Lankford, and Inhofe’s bill to maintain the use of EBITDA to calculate interest deductibility. Maintaining the use of EBITDA helps keep down the after-tax interest costs and taxes of employers who are still working to recover during the economic downturn. Further, EBITDA is a common international standard; by keeping the U.S. tax code in line with our global competitors, we can retain investment and encourage job creation within our borders.” – U.S. Chamber of Commerce
“National Taxpayers Union strongly urges Congress to pass the ‘Permanently Preserving America’s Investment in Manufacturing Act,’ which will spur economic growth, create jobs and help our nation recover from the economic effects of the pandemic.” – Brandon Arnold, Executive Vice President, National Taxpayers Union
“I applaud legislation introduced by Senators Roy Blunt, Rob Portman, James Lankford, and James Inhofe to prevent a tax hike on American businesses deducting interest expenses. If lawmakers fail to act, this deduction will narrow at the end of the year.” – Grover Norquist, Americans for Tax Reform