As Congress deliberates on the Tax Relief for American Families and Workers Act, the Ohio Business Roundtable urged Ohio's delegation to support the legislation as it contains many beneficial provisions to benefits our state's economic development.
"Ultimately, the Tax Relief for American Families and Workers Act is a win for businesses, for families, for communities, and for Ohio," said Pat Tiberi, President and CEO of the Ohio Business Roundtable.
The Tax Relief for American Families and Workers Act will reprioritize American businesses, including those that call Ohio home, by restoring three vital pro-growth tax policies that have expired or are being phased out:
1. Full Expensing of Research and Development (R&D) Investments
As of 2022, businesses are required to expense R&D investments over five years rather than in the same year the investments occurred. This will cost more than 10,000 American jobs will each year over the next decade without immediate R&D expensing.
To learn more about the expensing of R&D investment, the national Business Roundtable has produced the following video:
2. Full Expensing of Investments in New Equipment, Machinery and Technology
Starting in 2023, businesses can only expense 80% of investments in new equipment, falling to 60% in 2024, 40% in 2025, 20% in 2026 and eliminated completely in 2027. Restoring this policy would generate 73,000 American jobs.
3. Limited Interest Deduction on Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
As of 2022, the business interest deduction is restricted to 30% of a company’s earnings before interest and taxes (EBIT) rather than EBITDA. The U.S. is now an international outlier on business interest deductibility, which will cost the U.S. economy 867,000 jobs, $58 billion in lost wages and $108 billion in GDP.
In addition to the business policies, the Ohio Business Roundtable also supports provisions that will expand the child tax credit, which will help families better balance their participation in the workforce and providing for their kids.
The proposed tax package also increases the federal Low-Income Housing Tax Credit that OBRT has supported at the state level seeing as Ohio is facing a housing shortage for our skilled workforce given the recent economic development victories the state has announced.