RealClearPolitics: Hey Senate: Don’t Fumble This No-Brainer Tax Bill

This season, we NFL fans had the pleasure of witnessing back-to-back Super Bowl wins by the current generational dynasty and super duo, quarterback Patrick Mahomes and tight end Travis Kelce of the Kansas City Chiefs. It was their third championship together thus far. 

Now, imagine both Mahomes and Kelce were up for contract extensions next year. They’re not, but play along. Would you extend their contracts? Is it even a question? Can you imagine the confusion and anger if Kansas City let them go? This is how I feel about the Tax Relief for American Families and Workers Act. We’ve got a great thing going, with demonstrable success, and now it’s up to the Senate to re-sign this powerhouse growth legislation for another term.

The Tax Relief for American Families and Workers Act passed the House with bipartisan support, meaning that even partisan bickering couldn’t stop either side from voting for more jobs, higher wages, and a growing economy. At its core, the bill extends and expands upon the successful 2017 tax reforms in the Tax Cuts and Jobs Act. 

First, it extends three potent tax relief provisions targeting business investment, research and development, and deductions. Not surprisingly, when you reduce the cost of business investment and research and development (R&D), you get more investment and innovation. A whole lot more. Investment grew 20%, and businesses put an extra $2 trillion into R&D. What was the result? More than 21 million jobs supported by the R&D investment alone, with an additional 867,000 jobs if we extend the interest deduction relief.

Make no mistake. These measures are not a burden on our system. Quite the opposite. As Arizona Congressman David Schweikert argued on the House floor, “[I]f you look at the 2017 tax reform, where did we get the greatest economic boost with the least amount of cost? It was actually the R&D and the expensing. We have models that make it perfectly clear the expensing was the one portion of the tax reform that actually paid for itself.”

The opposition consisted mostly of nitpicking and minutia irrelevant to the bill’s overall goals. Congressman Drew Ferguson of Georgia appropriately reminded his colleagues, “[M]aking sure our businesses are competitive through research and development and then having the capital to turn those ideas into a product and then turn those products into jobs here in America is something we should be doing.”

There is no better example of “doing” than American manufacturing. As CEO of the National Association of Manufacturers, Jay Timmons, put it, “Remember the 2017 tax reforms? They were rocket fuel for our industry. We kept our promises to raise wages, hire workers and invest in our communities. We would not be outpacing other countries without them.”

To be sure, the bill doesn’t overlook the heart and soul of the U.S. economy – small businesses. It would increase small business expensing by $290,000 more than the 2017 reforms and cut red tape by adjusting the reporting threshold for subcontract labor – the first update since the 1950s. 

Originally published in — 3/6/24