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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By Mike O’Rielly
Congress is working on tax policies that could shape the future of American businesses, and one change is more urgent than ever if the goal is to enact an economic pro-growth tax law: bringing back the EBITDA standard for business interest deductions.
Congress can empower U.S. businesses to expand operations – whether buying property, building factories, or hiring workers – by rolling back a punishing change to interest deductibility that is making it harder for Main Street businesses to bet on growth by taking on debt.
High interest rates remain a top challenge for U.S. businesses, making it harder and more xpensive for companies to raise capital, hire ew workers, and grow. But the bite of high interest rates is made even worse by the tricter EBIT standard on business interest deductions.
