U.S. Reps. Ron Estes (R-KS) and Adrian Smith (R-NE) commended their chamber’s passage of bipartisan tax relief legislation that includes provisions from their separate bills.
The U.S. House of Representatives on Jan. 31 voted 357-70 to approve the Tax Relief for American Families and Workers Act of 2024, H.R. 7024, a tax package that includes R&D expensing provisions advocated for by Rep. Estes that are similar to those in his American Innovation and R&D Competitiveness Act, H.R. 2673, which amassed 218 cosponsors, including Rep. Smith.
“High costs of goods and services and burdensome regulations have strained pocketbooks and the economy, and Americans need a break,” Rep. Estes said. “The Tax Relief for American Families and Workers Act provides the win we need.”
Rep. Smith also voiced support for H.R. 7024, which includes language from his American Innovation and Manufacturing (AIM) Act, H.R. 2788, which would amend the U.S. tax code to increase the cap on deductible business interest to pre-2022 levels.
“The need to ensure our tax code reflects the cost of doing business is urgent, as Americans continue to deal with recent high inflation and higher interest rates,” said Rep. Smith. “By ensuring capital-intensive industries can fully deduct the cost of interest from their taxes, this legislation enhances the opportunity to develop new products in America, create jobs by making those products here, and then sell those products around the world.”
Prior to 2022, businesses could deduct 30 percent of earnings before interest, tax, depreciation, and amortization — the deduction standard known as EBITDA. A change in the tax code limits the deduction to only EBIT, excluding depreciation and amortization, and presents an additional cost for businesses that must take out loans to finance large capital investments, according to a bill summary provided by Rep. Smith’s staff.
Language from Rep. Smith’s bill that’s included in H.R. 7024 would restore the full EBITDA standard for deductions through 2025.
The U.S. Senate on Feb. 1 received the larger bill for consideration.