Office of Rep. Adrian Smith
Representatives Adrian Smith (R-NE), Joe Morelle (D-NY), Kevin Hern (R-OK), and Brad Schneider (D-IL) introduced bipartisan legislation to promote investments in America’s manufacturing sector and other capital-intensive industries. The American Investment in Manufacturing and Main Street (AIMM) Act would amend the U.S. tax code to increase the cap on deductible business interest to pre-2022 levels. This change will promote further domestic investment while helping address concerns about rising interest rates.
Prior to 2022, businesses could deduct 30 percent of earnings before interest, tax, depreciation, and amortization—a deduction standard known as EBITDA. A change in the tax code limits the deduction to only EBIT – excluding depreciation and amortization. This presents an added cost for businesses often required to take out loans to finance large capital investments in their facilities and equipment, this would have a disproportionate impact on the manufacturing sector of our economy and could harm its competitiveness in the global market. The AIMM Act would restore the full EBITDA standard for deductions.
The members released the following statements:
“After four years of failed economic policies, American businesses face challenges due to a sustained high-interest environment and obstacles to their competitiveness,” said Rep. Smith. “Ensuring capital-intensive industries can deduct more of the cost of interest from their taxes is critical to unleashing opportunity for our job creators and workers to make and deliver their world-class American products to eager consumers both at home and abroad. I thank my colleagues Rep. Morelle, Hern, and Schneider for joining me to promote this bipartisan bill to restore American competitiveness.”
“Local businesses and manufacturers are the backbone of our economy, supplying high-quality jobs and helping to revitalize communities across the country,” said Rep. Morelle. “I’m proud to sponsor this legislation that will end a harmful tax hike and allow for greater investment in manufacturing at a time when it’s needed most. I’m grateful to Rep. Smith for his partnership as we continue working to support and uplift America’s manufacturing industry.”
“Americans are looking for relief from a harsh economy. Interest rates are going up, making the cost of capital and investment more expensive. To make matters worse, stricter interest deductibility limitations on businesses ultimately fall on the American worker in the form of lower wages and fewer jobs,” said Rep. Hern. “The increased limitation on interest deductibility makes American businesses less competitive in the global marketplace. I’m happy to join my colleagues to reintroduce this bipartisan bill to reverse the stricter standard and empower American job creators.”
House cosponsors of the bill include Reps. Max Miller (R-OH), Randy Feenstra (R-IA), Darin LaHood (R-IL), Vern Buchanan (R-FL), Lloyd Smucker (R-PA), Nathaniel Moran (R-KS), David Kustoff (R-TN), Mike Carey (R-OH), Marilyn Strickland (D-WA), Rudy Yakym (R-IN), Jimmy Panetta (D-CA), Mike Quigley (D-IL), and Claudia Tenney (R-NY).
The legislation is supported by numerous stakeholder groups, including the National Association of Manufacturers (NAM), Charter Communications, and the Restore American Investment Now (RAIN) Coalition.
“The American Investment in Manufacturing and Main Street Act will lower the cost of financing the critical investments in equipment and machinery necessary for manufacturing growth. Manufacturers rely on business loans to finance job-creating projects and capital investments, leading to increased growth and expansion. Manufacturers thank Rep. Smith, Rep. Morelle, and Sen. Capito for introducing the AIMM Act to restore a pro-growth interest deductibility standard, and we urge Congress to act swiftly to pass comprehensive tax legislation that supports manufacturing investments here in the U.S.,” said Chris Netram, Managing Vice President of Policy, National Association of Manufacturers.
“We applaud Reps. Adrian Smith (R-NE), Kevin Hern (R-OK), Joe Morelle (D-NY), and Brad Schneider (D-IL) for introducing legislation that would restore the pro-investment Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) standard for interest deductibility in the tax code. ‘The American Investment in Manufacturing and Main Street Act’ recognizes that job-generating capital investments—like the expansion of broadband networks to rural communities—require a return to the strong, well-established EBITDA standard that makes financing these long-term investments possible. We look forward to working with Reps. Smith, Hern, Morelle, and Schneider to advance this critical legislation,” said Catherine Bohigian, Executive Vice President, Government Affairs, Charter Communications.
“A pro-growth tax code directly impacts the potential for U.S. job creation, increased capital investment, and higher wages for workers. “The Restore American Investment Now” (RAIN) Coalition applaud Sen. Shelley Moore Capito (R-W.Va.) and Reps. Adrian Smith (R-NE), Joe Morelle (D-NY), Kevin Hern (R-OK), and Brad Schneider (D-IL) for introducing the American Investment in Mainstreet Manufacturing Act, recognizing the EBITDA standard’s vital role in lifting the American economy for everyone. Increasing the cap on deductible interest by reinstating the pre-2022 EBITDA standard is always important, but it has an even more critical role in this era of rising interest rates and economic uncertainty. The current lower EBIT standard means less expansion, lower wages, fewer jobs, and decreased capital investment that impacts all Americans. We thank these legislators for their leadership on this vital issue,” said Michael O’Rielly, Spokesman, RAIN Coalition.