Legislation led last week by U.S. Sen. Roy Blunt (R-MO) would ensure that American manufacturers may continue to make large investments, hire workers, and produce goods in the United States.
“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,” Sen. Blunt said. “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.”
Sen. Blunt on April 12 sponsored the Permanently Preserving America’s Investment in Manufacturing Act of 2021, S. 1077, with three Republican cosponsors, including U.S. Sen. Rob Portman (R-OH). The bill would amend the Internal Revenue Code of 1986 to permanently extend the allowance for depreciation, amortization, or depletion for purposes of determining the income limitation on the deduction for business interest, according to the congressional record bill summary.
Generally, according to the senator’s office, American businesses may deduct interest as a business expense. The deduction is limited to 30 percent of earnings before interest, taxes, depreciation, and amortization.
However, beginning in 2022, depreciation and amortization will be removed from the calculation, limiting the ability of businesses to deduct their interest expenses, discouraging investments, and increasing costs for U.S. job creators, especially manufacturers and other capital intensive businesses, Sen. Blunt’s office said.
If enacted, S. 1077 would prevent the 2022 change from taking effect.
“The strength of America’s economy has always been based on our ability to make things and grow things,” said Sen. Blunt. “I urge all of our colleagues to support the bill.”
The legislation has garnered widespread praise among the nation’s leading manufacturers and advocates for a competitive tax code, including the National Association of Manufacturers, the U.S. Chamber of Commerce, the National Taxpayers Union, and Americans for Tax Reform.