A critically important pro-growth feature of the Trump tax cuts of 2017, just phased down yesterday – January 1, 2024. It’s a back-door tax increase that the Democrats are hoping no one notices.
But WE noticed, and so do American businesses — especially construction and manufacturing firms — that make critical capital investments in our economy. We are speaking of the provision of the Trump tax plan that allows businesses to immediately write off the cost of their purchases of everything from equipment, to machinery, to delivery trucks, to Boeing airplanes.
Because of arcane budget rules, that 100% “expensing” provision gets phased out by 20% each year starting in 2023. This year, firms will only deduct 60% of their capital purchases and by 2026 they will lose the incentive entirely.
What is infuriating about this tax hike is that the Trump tax cut delivered huge dividends to the economy. The expensing provision combined with other features of the plan that lowered tax rates, helped bring more than $1 trillion of capital investment and factories back into the United States from abroad. Hello! It WORKED JUST AS PLANNED. But the Democrats in Congress and Biden are immune to this evidence and then they complain about jobs being exported overseas.
This is stupidity on steroids and will hurt American workers and companies.