SC Nebraska News

Washington, D.C. - Representatives Adrian Smith, Joe Morelle, Kevin Hern, and Brad Schneider have come together to support the American Innovation and Manufacturing (AIM) Act. This legislation, which was included as part of the bipartisan Tax Relief for American Families and Workers Act, aims to promote investments in America's manufacturing sector and other capital-intensive industries. One of the key provisions of the AIM Act is the amendment of the U.S. tax code to increase the cap on deductible business interest to pre-2022 levels.

In light of recent high inflation and higher interest rates, Representative Smith emphasizes the urgency of ensuring that the tax code reflects the cost of doing business. He highlights the importance of allowing capital-intensive industries to fully deduct the cost of interest from their taxes, as it enhances opportunities for developing new products in America, creating jobs, and expanding market reach globally. Representative Smith expresses his gratitude towards Representatives Morelle, Hern, and Schneider for their cooperation and leadership in this effort.

Representative Morelle, who has been an advocate for supporting local manufacturers, applauds the passage of the legislation. He emphasizes the significance of permanently preserving the previous earnings before interest and taxes formula, which will enable greater investment in manufacturing firms across the country. By doing so, the backbone of the American economy will be strengthened. Representative Morelle expresses his gratitude for the inclusion of these provisions in the bipartisan Tax Relief for American Families and Workers Act and looks forward to continuing to work with his colleagues to enact solutions that support the manufacturing sector.

Highlighting the impact of high interest rates on the cost of capital and investment, Representative Hern stresses the adverse effects of the stricter interest deductibility limitation on businesses. He warns that this limitation will ultimately burden American workers through lower wages and fewer job opportunities. Representative Hern commends the passage of the AIM Act language as part of the bipartisan Tax Relief for American Families and Workers Act. He believes that these provisions will reverse the stricter standard and empower American job creators, thereby benefiting the manufacturing industry.

Representative Schneider echoes the sentiments of his colleagues and emphasizes the positive impact the legislation will have on the manufacturing industry in Illinois. He highlights the creation of jobs and the growth of the American economy that will result from restoring interest deductibility for Illinois manufacturing. Representative Schneider takes pride in the bipartisan nature of the legislation and its inclusion in the Tax Relief for American Families and Workers Act.

The AIM Act language included in H.R. 7024 addresses a change in the tax code that limited the deduction of business interest to earnings before interest and taxes (EBIT) only, excluding depreciation and amortization. This change presented an added cost for businesses that rely on loans to finance large capital investments. The manufacturing sector, in particular, would have been disproportionately affected, potentially harming its competitiveness in the global market. The AIM Act seeks to restore the full EBITDA standard for deductions through 2025.

The passage of this legislation is a testament to the bipartisan effort to support manufacturing investment in the United States. By amending the tax code to increase the cap on deductible business interest, the AIM Act aims to create a favorable environment for capital-intensive industries and promote economic growth. This legislation marks an important step towards strengthening the manufacturing sector and ensuring its competitiveness in the global marketplace.