WASHINGTON, D.C. – American manufacturing reports its strongest expansion in more than four years as output hit its highest level, according to S&P Global’s flash US purchasing managers index, and manufacturers report employment conditions hit a three year high, providing the latest proof that Republicans’ pro-growth tax policies are delivering for American workers, manufacturers, and job creators.
Ways and Means Committee Chairman Jason Smith (MO-08) issued the following statement:
“For far too long, Beltway Bureaucrats and Washington Democrats neglected the needs of blue-collar workers and the communities that built this nation, forcing manufacturing overseas. The Ways and Means Committee went out to those forgotten communities across our country to listen directly to workers and manufacturers about what they needed to compete and grow again. We took what we heard from those conversations and put it into the Working Families Tax Cuts, delivering permanent, pro-worker, pro-growth tax policy that every single Democrat in Congress voted against. When Republicans made full expensing for new equipment, factories, and research and development permanent, we gave manufacturers the certainty they needed to invest, build, and create jobs here at home. As new factories are built across America, it not only means bigger paychecks for workers – who are now benefiting from No Tax on Overtime – but it also means more business for the mom-and-pop shops, suppliers, and truckers that keep our local economies running. Republicans are standing with the working families that Congressional Democrats left behind, and the results speak for themselves.”
TAX PROVISIONS SUPPORTING MANUFACTURERS:
- Permanent full, immediate expensing for equipment and machinery – Manufacturers can deduct 100 percent of the cost of new equipment the year they buy it instead of spreading the deduction out over several years. Previously, businesses could only deduct 40% for 2025 and 20% for 2026.
- First-ever full expensing for new factory and facility construction – Manufacturers can now immediately expense the cost of building or expanding a plant, not just the equipment inside it.
- Permanent research & development (R&D) expensing – Businesses can once again deduct research and development costs immediately, reversing a 2022 change that forced companies to amortize those costs over five years. Real investment in intellectual property increased nearly 7% since the bill passed.
- Permanent interest deductibility – Calculated on an EBITDA basis, giving capital-intensive manufacturers more room to finance new equipment and facilities.
- Permanent small business deduction – Keeps the 20 percent pass-through deduction in place for the family-owned manufacturers that make up most of the sector, assisting more than 35 million small businesses.
- These pro-manufacturing provisions are estimated to create over 1 million manufacturing jobs, $284 billion in additional manufacturing-based GDP growth, and raise manufacturing wages by $126 billion.
READ: Smith on July Jobs Report: Private Sector Keeps Adding Jobs Thanks to the Working Families Tax Cuts