Rep. Arrington and Sen. Toomey Introduce Measure to Accelerate Economic Recovery, Create More Jobs
Washington, April 16, 2021
WASHINGTON, D.C. – Today, U.S. Congressman Jodey Arrington (R-Texas) and U.S. Senator Pat Toomey (R-Pa.) introduced the ALIGN Act to help ensure America’s economic recovery continues, wages keep rising, and employers keep hiring.
The Accelerate Long-Term Investment Growth Now (ALIGN) Act makes permanent one of the most pro-growth policies in the Tax Cuts and Jobs Act: full and immediate expensing. Full expensing allows businesses to deduct the cost of new investments (machinery, equipment, etc.) in the year they are purchased, instead of being depreciated under complex IRS rules. Under current law, this provision will begin to phase out at the end of 2022, fully expiring at the end of 2026.
Original cosponsors of the ALIGN Act include Devin Nunes (CA-22), Vern Buchanan (FL-16), Adrian Smith (NE-3), Tom Reed (NY-23), Mike Kelly (PA-16), Jason Smith (MO-8), Tom Rice (SC-7), David Schweikert (AZ-6), Jackie Walorski (IN-02), Darin LaHood (IL-18), Brad Wenstrup (OH-2), Drew Ferguson (GA-3), Ron Estes (KS-4), Lloyd Smucker (PA-11), Kevin Hern (OK-1), and Carol Miller (WV-03).
“There’s no bigger incentive in the tax code for job creation and economic expansion than allowing businesses, both large and small, to fully and immediately deduct the cost of new investments, equipment, and machinery,” said Rep. Arrington. “Full expensing was a critical component to the Tax Cuts and Jobs Act, and the economic boom that ensued prior to the pandemic. Unfortunately, this powerful provision will soon phase out, creating uncertainty for businesses as they look to rebound from the economic fallout and prepare for future expansion and innovation. The ALIGN Act will lower the cost of capital and simplify the tax code as businesses look to make vital investments, bring workers back, onshore manufacturing capabilities, and ramp up production. This legislation will lead to stronger growth, more jobs, increased productivity, and higher wages for working families.”
“The end of the COVID-19 pandemic is in sight, and Congress should enact policies that enable workers and job creators to propel our economic recovery,” said Senator Toomey. “Allowing businesses to immediately write off purchases of new equipment was the most pro-growth feature of the 2017 tax reform law. Capital investment grew and workers became more productive, resulting in more jobs and higher wages. Our legislation will make full expensing permanent, providing manufacturers and businesses of all sizes with more certainty around investment planning and growth.”
The ability to efficiently finance equipment and machinery purchases is critical to the growth of American manufacturing. Unfortunately, tax reform’s “full expensing” begins to phase out in 2023,” said Chris Netram, Vice President of Tax and Domestic Economic Policy for the National Association of Manufacturers. “The NAM strongly supports the ALIGN Act, which will make full expensing permanent. Preventing full expensing from phasing down in the coming years will ensure that manufacturers in America can meet the challenges our country faces as the industry leads the economic recovery from COVID-19.
Full text of the bill is available here.