March 20, 2024
As I write this Legislative Report, Congress is on the threshold of accomplishing something good for business: passing the Tax Relief for American Families and Workers Act.
This legislation is needed for our corrugated industry and our manufacturing customers because it will restore three tax policies vital to our companies, our employees, and the future of the United States immediate recognition of domestic research and development expenses, enhanced interest deductibility, and 100% accelerated depreciation. All three of these tax policies have a long history of bipartisan support and are critical to strengthening U.S. global competitiveness. And I believe they are needed most now because capital spending is expected to decline in 2024 after its peak in 2023.
According to a recent report in Bloomberg News, there was a 63% increase in investment in plants and production facilities in 2023, the largest single-year gain since 1951. This was fueled by companies taking advantage of tax credits still in force from the 2017 tax legislation, which are scheduled to expire in the coming years. Hence, I believe it is important for Congress to extend and make permanent these provisions to bolster our manufacturing industries.
For those of us who own small and mid-size businesses, these tax provisions are critical to maintaining a competitive position and to ensure our profitability, especially in light of the tremendous inflationary pressures we’ve faced in the past three years.
“The absence of these three tax provisions directly impacts our ability to invest in new technology, to purchase equipment, and to create jobs,” said Courtney Silver, president and owner of precision machining company Ketchie Inc. and chair of the National Association of Manufacturers’ Small and Medium Manufacturers Group, in a news release.
“Nearly 90% of manufacturers share similar concerns about their higher tax burden, and if left unaddressed, our companies and our teams will have a harder time securing an edge over our global competitors. Passing this law would give companies like ours the certainty needed to plan for growth and more investments,” she added.
Now is the time for Congress to prioritize U.S. innovation, manufacturing, and economic growth, particularly as strategic competitors such as China are offering ever more generous incentives. Congress must act to protect the thousands of small and mid-size businesses, hundreds of thousands of family-supporting jobs, and billions of dollars of pro-growth investments supported by these provisions.
Eric Elgin is owner of Oklahoma Interpak and chairman of AICC’s Government Affairs subcommittee. He can be reached at 918-687-1681 or eric@okinterpak.com.
