WASHINGTON, D.C. – The House Committee on Ways and Means today passed legislation that would counter China’s growing global economic influence by restoring American business competitiveness, securing global supply chains, and prohibiting U.S. foreign land sales to companies from countries of concern. The Build It in America Act, written based on feedback the committee received from American farmers, families, workers, and small business owners through various hearings held this year across the country, would also lead to lower prices at the gas pump for consumers and repeal certain special interest green energy handouts in Democrats’ so-called Inflation Reduction Act, which disproportionately benefited big banks and large corporations.
In his opening remarks during consideration of the bill, Ways and Means Chairman Jason Smith (MO-08) discussed the feedback the committee received from the American people during field hearings that formed the basis for this legislation:
“This Committee has traveled over 5,000 miles. The families, farmers, workers, and job creators we’ve heard have spoken with one voice. They want Congress to invest in America, to give workers and businesses a fair shot at competing with the rest of the world, to stand up to China and restore our energy independence to lower gas prices. Under the Biden Administration, the opposite is happening. Over the past few years, America has shrunk on the world stage.”
Click here to read Chairman Smith’s full remarks.
Click here or on the image above to watch
Key Facts on the Build It in America Act (H.R. 3938):
Restores American competitiveness and innovation by extending the ability for companies to immediately deduct research and development (R&D) costs.
- Starting in 2022, companies could no longer immediately deduct R&D costs and have been required to gradually spread those expenses over time, for a minimum of 5 years and as high as 15 years.
- Losing the immediate deduction has led to higher tax bills for small, innovative businesses – forcing them to slow their growth, reduce their workforce, or borrow funds to pay a big tax bill to the IRS.
- This provision will ensure that the United States sustains its status as a global innovation leader.
Ensures that mid-sized businesses can deduct borrowing costs during this time of rising interest rates by extending interest deductibility.
- Starting in 2022, employers face a more restrictive limit on the amount of business interest that they can deduct each year. Instead of using “earnings before interest, taxes, depreciation, and amortization”, companies may deduct interest expenses only up to 30 percent of their “earnings before interest and taxes”, resulting in higher tax bills.
- With today’s higher interest rates, the 2022 change increases costs for mid-sized companies and industries that are required to finance their operations with debt and do not have the ability to issue other financing options like issuing stock.
- This provision will ensure that the United States is a competitive location to hire, invest, and grow for manufacturing, energy production, and other critical industries.
Promotes American jobs and manufacturing by extending 100 percent expensing.
- Starting in 2023, job creators are able to immediately deduct only 80 percent of the cost of equipment, machinery, and vehicles, with the rest of the deduction claimed over the life of each asset.
- This provision will ensure that businesses are incentivized to re-shore their operations and facilities from China back to the United States.
Lowers the price at the pump by repealing Democrats’ superfund tax on petroleum.
- Policies that harm affordable and clean American energy production drive up gasoline prices and increase American dependence on foreign countries.
- Repealing this tax on affordable and secure energy resources from Democrats’ so-called Inflation Reduction Act will improve our energy security and lower prices for consumers.
Encourages supply chains to get out of China by protecting American companies from the Biden Administration’s misguided tax regulations that discourage near-shoring to Western Hemisphere countries.
- The Biden Administration’s foreign tax credit regulations favor countries like China and Russia over neighboring, allied countries in Central and South America.
- By rolling back these regulations, this provision removes an unnecessary roadblock to moving operations closer to home.
Stops agricultural land purchases by foreign adversaries with a tax rule blocking the purchases of American farm and ranch land by buyers from “Countries of Concern,” including China, Russia, and Iran, and preventing undisclosed purchases of such land.
- S. adversaries are attempting to secure access to agricultural products by quietly acquiring U.S. farmland. China’s reported holdings of farmland are said to be 384,000 acres and that acreage has grown by more than 50 percent since 2019. What’s more, questions remain about whether China’s ownership has been fully reported.
- The Build It in America Act builds off existing tax rules for real estate sales by foreign companies and investors. The rule applies to “Countries of Concern,” which are those engaged in a long-term pattern of conduct significantly adverse to the national security of the United States, including the People’s Republic of China (not including Taiwan), the Russian Federation, Iran, North Korea, Cuba, and the regime of Nicolas Maduro in Venezuela.
- S. citizens and permanent residents, including dual citizens, are exempt.
Replaces Democrats’ bad tax policy – which includes hundreds of billions of dollars in special interest tax breaks for big business and the wealthy – with good tax policy that returns money to American taxpayers and provides real assistance to our small businesses and job creators.
- Democrats’ so-called Inflation Reduction Act included handouts that placed the American taxpayer on the hook for big payouts to big corporations and big banks.
- Companies with over $1 billion in sales receive more than 90 percent of special interest tax subsidies for electricity.
- Banks and insurers receive over half of these tax breaks, and more than three times as much as any other industry.
- The Inflation Reduction Act also created new tax credits for luxury electric vehicles purchased by the wealthy.
- Nearly 80 percent of electric vehicle credits flow to households earning over $100,000.
- Under the Build It in America Act, those bad tax policies – which are intended to benefit a hand-picked group of politically connected individuals and corporations – are replaced in favor of broad-based policies that create jobs and benefit hardworking Americans.
- Repeals two special interest credits not operative until 2025 or later.
- Repeals three electric vehicle credits which have ballooned in cost by over 700 percent since last fall.