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)).
U.S. industrial-policy efforts frequently undermine themselves through counterproductive tax regulations, creating a paradox that hinders genuine investment and economic growth. Policymakers have committed substantial resources and political capital toward reshoring domestic manufacturing, upgrading national infrastructure, and enhancing American economic competitiveness.
U.S. industrial-policy efforts frequently undermine themselves through counterproductive tax regulations, creating a paradox that hinders genuine investment and economic growth. Policymakers have committed substantial resources and political capital toward reshoring domestic manufacturing, upgrading national infrastructure, and enhancing American economic competitiveness. Indeed, these goals have been central to the Trump administration’s stated economic priorities. Yet despite these intentions, poorly structured tax policies simultaneously create substantial barriers to investment, growth, and global competitiveness.
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.
“A pro-growth tax code directly impacts the potential for U.S. job creation, increased capital investment, and higher wages for workers.”
Beginning in the 2022 tax year, an unworkable limitation in the TCJA made it far more costly–even unaffordable–for U.S. job creators to borrow the money they need to invest and grow.
