Here Is Why Congress Needs To Extend Expiring Tax Cuts

In 2017, federal lawmakers approved an historic tax reform package that lowered the burden on manufacturing and industrial metals companies, allowing them to invest more in their operations, create more jobs, and give back more to their communities. Many of the provisions of that law expire in 2025, however, which is why the Metals Service Center Institute’s partners at the National Association of Manufacturers (NAM) have launched an industry-wide campaign called Manufacturing Wins to educate lawmakers, candidates for the U.S. Congress and the White House, and the Biden administration about the urgent need to extend, or make permanent, these tax policies.

If lawmakers do not act, at the end of 2025 virtually all manufacturers and companies in the metals industry will face devastating tax increases that will cost jobs, stifle growth, and stunt innovation. Specifically, small firms, which are often organized as pass-through businesses that pay taxes through the individual income tax system, face increases in their income taxes due to the loss of tax reform’s 20 percent pass-through deduction. Additionally, if Congress does nothing, family-owned manufacturers would experience changes to the estate tax that subject more of their assets to taxation upon the death of a loved one.

Finally, investments in manufacturing growth will continue to be delayed, as they are now, without action to restore immediate research and development expensing, accelerated depreciation for capital equipment purchases and a pro-growth interest deductibility standard. Click here to learn more about what is at stake.

A recent NAM survey found that if U.S. lawmakers fail to prevent the 2025 tax policy expirations, 73 percent of manufacturers would be forced to limit their capital investments, 65 percent would have to reduce job creation, and 52 percent would spend less on research and development. More than nine in 10 pass-through manufacturers said that the loss of the pass-through deduction would harm their ability to grow, create jobs, and invest in their business.