Policy and Legal

The House Ways and Means Committee has released legislative text for the tax provisions of the “one big, beautiful bill” that Congress plans to pass in order to implement President Trump’s legislative agenda (The Hill).

• The Ways and Means bill includes the “to-do” list the NAM has called for throughout our “Manufacturing Wins” tax campaign, including reinstating the “tax trifecta,” increasing the pass-through deduction to 23% and preserving tax reform’s individual and corporate tax rates.

The NAM says: “Chairman [Jason] Smith and the Ways and Means Committee are delivering what manufacturers in America have called for and what our industry needs to compete and win,” said NAM President and CEO Jay Timmons.

• “The 2017 tax reforms were rocket fuel for manufacturers—driving job growth, higher wages and investment in communities. This bill brings us closer to the vision of a 15% effective tax rate for manufacturers that President Trump and I discussed in 2016.”

On pass-throughs: “For the 96% of manufacturers that are organized as pass-through businesses, this bill is more than policy—it’s a path to growth,” Timmons said, in a quote that was cited by The Hill.

• “It means the ability to buy equipment, hire workers, increase pay and expand operations with greater certainty and confidence. Not only is the Ways and Means Committee preserving the benefits of the Tax Cuts and Jobs Act for these businesses—this bill makes the law even more competitive, including by increasing and making permanent the job-creating pass-through deduction.”

The whole deal: “The Ways and Means Committee’s bill reflects the full range of NAM tax priorities, which will drive manufacturing growth in America,” Timmons continued.

• “To support small business job creation, the bill increases [to 23%] and makes permanent the pass-through deduction, protects more family-owned manufacturers from the estate tax [by increasing the exemption to $15 million] and maintains the TCJA’s pro-growth tax rates.”
• “To bolster America’s competitiveness on the world stage, the bill preserves the 21% corporate tax rate as well as the TCJA’s international tax provisions.”
• “And to incentivize investment and innovation in the United States, the bill revives and extends immediate R&D expensing, full expensing for capital equipment purchases and a pro-growth standard for interest deductibility [for the years 2025–2029].”
• “Congress must act on the Ways and Means bill and make these pro-growth tax provisions permanent—because when manufacturing wins, America wins.”

Bottom line: “This is a great leap forward in securing very competitive tax policy that will attract investment and create jobs here in the United States,” Timmons said to The New York Times (subscription) yesterday, building on the NAM’s urgent push in recent weeks to jumpstart a “comprehensive manufacturing strategy” to bolster investment, hiring and growth in the United States.