House Republicans To Introduce Bill Cutting Taxes On Factories

Republicans in the House of Representatives, led by Indiana Reps. Jim Banks and Jackie Walorski, will introduce a bill later Thursday to cut costs for American manufacturers by increasing their long-term tax deductions.

The bill, the Renewing Investment in American Workers and Supply Chains Act, decreases the asset recovery period for businesses from 39 years to 20 years and ties the amount that companies may deduct to inflation. It would add 230,000 new jobs while increasing industrial investment by 2.3% and wages by one percent, according to the Tax Foundation.

The federal tax code allows companies to deduct the value of commercial real estate properties, such as factories, as the value of those properties declines. Currently, companies must do so over a 39-year period. Critics of the 39-year deduction period argue that such a long time prevents companies from fully recovering the costs of their investment, due to inflation. They urge the federal government to either shorten the period or allow companies to deduct the full costs of their purchases immediately.