Restoring the pro-growth EBITDA standard in §163(j) will ensure the U.S. can achieve its full economic potential by unleashing the funding that powers the investments that create American jobs and drive economic growth.
Nearly 100 years of precedent was set aside in 2022 when the interest deductibility cap’s standard changed from EBITDA to EBIT. By excluding “DA” (Depreciation and Amortization), a stricter EBIT standard made it far more costly – and even unaffordable – for U.S. job creators to borrow the money they need to be able to grow.
We shouldn’t be making it harder for companies to raise capital, hire new workers, and expand – especially in today’s environment of elevated interest rates – but the current EBIT standard does just that.
The new EBIT standard hurts capital-intensive industries most – those businesses that rely on financing to expand and make the long-term investments that power our economy and create U.S. jobs.
The Stricter EBIT Standard Drives Up the Cost of New Investment – and that Means Less Investment, Less Economic Growth, and Fewer Jobs
An EBIT-Based Cap Creates a Global Competitive Disadvantage for the U.S. in Attracting New Investment
We need to ensure U.S. businesses can borrow the money they need to hire new workers and grow.
Restoring the pro-growth EBITDA standard in §163(j) will ensure the U.S. can achieve its full economic potential by unleashing the funding that powers the investments that create American jobs and drive economic growth.
We are an ad hoc, broad-based group of organizations making and supporting the long-term, capital-intensive investments that power the U.S. economy and create American jobs.
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Lawmakers are getting closer to the finish line with budget reconciliation. Extension of the expiring provisions of the Tax Cuts and Jobs Act (TCJA) remains paramount. With a unique opportunity to continue to simplify the tax code and embrace pro-growth reforms, the expansion of interest deductibility for businesses is a key step in this process.
The Restore American Investment Now (RAIN) Coalition today praised the House Ways and Means Committee for introducing legislation to restore the EBITDA standard for interest deductibility.
As lawmakers craft a reconciliation package that delivers on President Trump’s agenda of pro-growth tax cuts, Americans for Tax Reform urges lawmakers to restore the ability of businesses deducting net interest payments to include depreciation and amortization costs (Section 163(j)).
