Rep. Arrington Introduces ALIGN Act
Washington, March 30, 2023
WASHINGTON, D.C. – Today, Representative Jodey Arrington (TX-19) introduced the Accelerate Long-Term Investment Growth Now (ALIGN) Act, legislation tomake 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 began to phase out at the end of 2022, fully expiring at the end of 2026. Senator James Lankford (OK) is introducing companion legislation in the Senate.
“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. 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.”
“Business expenses are not business profits, so they should not be taxed as profits,” said Sen. Lankford. “The 2017 tax law encouraged more economic activity from our US manufacturers by allowing them to depreciate their capital and equipment during the year it was purchased instead of over years and years of tax returns. But that provision started phasing out at the end of 2022. High inflation and high costs for everything from gasoline to construction materials will continue to plague our economy unless we immediately pass my bill to allow businesses to invest in their employees and business future. Let’s get this passed and signed into law to help our vital US manufacturing sector and other US industries continue to create high-paying jobs.”
The ability to efficiently finance equipment and machinery purchases is critical to the growth of American manufacturing. Unfortunately, tax reform’s “full expensing” began to phase out in 2023,” said Chris Netram, Managing 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 and ultimately expiring in the coming years will ensure that small and medium manufacturers in America can meet the challenges our country faces as the industry leads the economic recovery and competes with China.”