By Rep. Adrian Smith
The American economy is powered by innovation and the hard-working Americans who faithfully do their jobs every day. The role of the federal government should be to empower, not hinder, the productive workers and world-leading innovators who drive our country’s remarkable capacity for growth. From the builders constructing our homes and bridges to the tech engineers opening new digital frontiers, the strength of our industries relies on a tax code which sets up American businesses to excel in a competitive global market.
When burdensome taxation, wasteful spending, and overregulation disincentivize investment, Americans pay the price: the average American family’s household expenses now cost $13,300 more annually compared with January 2021, according to the Joint Economic Committee, the committee in congress responsible for reviewing and overseeing economic indicators. Low-income and fixed-income Americans are hit the hardest by the effects of the irreversible inflation and market distortion we’ve seen during the Biden-Harris administration. Seniors dependent on Social Security and Medicare benefits have virtually no options to cope with the damage caused by high fuel prices and debilitating healthcare costs. At the same time, we are already seeing the consequences of policies enacted by the Democrats’ 2022 Inflation Act as investment in pharmaceutical research and development stalls. It is clear the current administration has strayed from sound policy.
Ill-considered government intervention in the market often does more harm than good, and a nation cannot tax and regulate its way to prosperity. To connect Americans with good-paying jobs, discover new life-saving cures, address energy shortages, and confront the expanding economic influence of China, there is no substitute for an investment-friendly environment which spurs growth across industries and incomes, and keeps the benefits grown here at home.
With this in mind, Republicans designed the 2017 Trump tax cuts to unleash economic growth, promote American business investment, and boost wages more meaningfully than any policy reforms in a generation. In fact, Tax Cuts and Jobs Act (TCJA) analysis by the National Bureau of Economic Research shows TCJA led to an increase in domestic investment of approximately 20 percent. While the Biden-Harris administration has continually proposed increasing the corporate tax rate, U.S. corporate tax receipts last year exceeded $445 billion, nearly double the $230 billion in corporate tax revenue the Treasury collected in 2017 prior to TCJA. With that in mind, I am working hard to gather input from stakeholders, job creators, and drivers of our nation’s growth potential to better understand why our 2017 tax bill was so successful in driving economic growth and apply those lessons to new tax policies moving forward.
One particular focus of our work on the tax code next year must be manufacturing. While manufacturing is an overlooked component of rural economies, towns and cities across Nebraska rely on manufacturers to drive their economies and provide good jobs alongside the agriculture Nebraska is known for. The latest report from the Bureau of Labor Statistics showed nearly 50,000 manufacturing jobs were lost last month, and job growth across the economy fell short of projections by nearly 100,000.
American manufacturers are already suffering under inflation, a worker shortage, and a sustained high-interest environment in the United States. Bipartisan legislation I have introduced, the AIM Act, would amend the U.S. tax code to increase the cap on deductible business interest to pre-2022 levels. By ensuring capital-intensive industries can deduct more of the cost of interest from their taxes, we can enhance opportunities to develop new products in America, create jobs by making those products here, and then sell those products around the world. I also continue working to address other issues in our tax code which can be an impediment to economic growth, such as ensuring research and development expenses are fully deductible and allowing small businesses to fully deduct the cost of new equipment in the year they incur the expense.
Pro-growth policies are the way forward, not a despairing addiction to taxation and federal overspending. Americans know this and are ready to grow our economy if our tax code gives them the chance. We’re the best in the world at finding new and more efficient ways to provide the goods and services our neighbors need, growing the economic pie for all. I will never stop fighting for sound policy which empowers American ingenuity and prosperity for the future.