Lankford Helps US Job Creators in the Uncertain Economy

WASHINGTON, DC – Senator James Lankford (R-OK) today introduced the Accelerate Long-term Investment Growth Now (ALIGN) Act, which would make permanent a provision in the 2017 Tax Cuts and Jobs Act (TCJA) that allowed businesses to fully expense new investments (machinery, equipment, etc.) in the year of purchase. That provision currently began to phase out in the federal tax code starting at the end of 2022 and expires at the end of 2026.

Lankford is joined in introducing the bill by Senators Jim Risch (R-ID), Marco Rubio (R-FL), John Barrasso (R-WY), Mike Braun (R-IN), Marsha Blackburn (R-TN), Todd Young (R-IN), Steve Daines (R-MT), John Boozman (R-AR), John Thune (R-SD), and Tim Scott (R-SC). Rep. Jodey Arrington (R-TX) is leading the bill’s introduction in the House of Representatives.

“Business expenses are not business profits, so they should not be taxed as profits,” said 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.”

“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 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.”

The bill is supported by the Oklahoma State Chamber, the National Association of Manufacturers, USTelecom, and a coalition that includes the National Taxpayers Union, 60 Plus Association, American Consumer Institute, Americans for Prosperity, Americans for Tax Reform, and Association of Mature American Citizens Action, Center for a Free Economy, Center for Freedom and Prosperity, Center for Individual Freedom, Consumer Action for a Strong Economy, Council for Citizens Against Government Waste, Independent Women’s Voice, Institute for Liberty, and Taxpayers Protection Alliance.

“We applaud Sen. Lankford for filing the ALIGN Act. It shows he is prioritizing economic growth by making this positive tax code change permanent. Oklahoma took the lead last year and became the first state in the country to make full expensing permanent on state taxes on businesses. We were proud to play a role in making Oklahoma a trailblazer on the state level, and we are confident Sen. Lankford’s ALIGN Act would be a welcome reform for businesses coast to coast,” said Chad Warmington, President/CEO of the State Chamber of Oklahoma.

“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.”

“The Accelerate Long-Term Investment Growth Now (ALIGN) Act will bolster the effort to extend broadband to every American. Our nation’s tax policy must continue to incentivize investments, particularly at a time when America’s broadband providers are investing $86B annually into our nation’s communications infrastructure. Pro-growth policies, like full expensing, unleash the growth and innovation fully displayed by America’s broadband providers and will continue to contribute to the effort to connect every community in our nation,” said Brandon Heiner, SVP Government Affairs, USTelecom.

The coalition members said in part in their letter, “On behalf of the undersigned taxpayer, consumer, and free market advocates, we applaud you for introducing the Accelerate Long-term Investment Growth Now (ALIGN) Act, which would make permanent full and immediate expensing for American investments in machinery and equipment, also known as 100 percent bonus depreciation. Your efforts, if successful, would grow the US economy and create jobs—especially in the country’s manufacturing sector.”

Background

Bonus depreciation has been in the tax code for more than 20 years and helps drive our global competitiveness. The 2017 Tax Cuts and Jobs Act (TCJA) expanded the practice to allow a businesses to immediately expense 100 percent of the cost of eligible property with a class life of 20 years of less. Under current law, the benefits began to phase out at the end of 2022. Specifically, property placed in service in the following years will see: 2023 – 80 percent expensing, 2024 – 60 percent expensing, 2025 – 40 percent expensing, and 2026 – 20 percent expensing. The ALIGN Act makes permanent full and immediate expensing for the same property as allowed in TCJA. The ALIGN Act encourages businesses to grow and compete by fully aligning their expensing during the same year of investing in new equipment, technology, and their qualified property.   

###