The Irrigation Association, Fairfax, Virginia, signed on to a letter addressed to Congressional leaders advocating for the extension of three tax policies.
The association was joined by more than 1,000 other businesses representing a diverse group of industries across the country.
The letter specifically urges Congress to take immediate action to extend three tax policies: immediate research and development expensing, a pro-growth interest deductibility, and standard and full expensing.
“Although legislation has been introduced in both chambers in support of these policies, Congress must act immediately to extend these competitive tax policies. Failing to do so will put hundreds of thousands of family-supporting jobs, cutting-edge innovation and pro-growth investments in America at risk,” the letter reads.
The three tax policies the letter specifically advocates for are as follows:
- Immediate research and development expensing: The letter emphasizes the importance of innovation in America’s economy and national security. It points out the negative impact of the recent requirement for businesses to amortize research and development expenses over several years instead of deducting them in the same year. This change makes research & development more expensive in the U.S. and puts thousands of jobs at risk.
- Pro-growth interest deductibility standard: The letter discusses the critical role of debt financing in business growth and job creation. It highlights the shift in tax policy from a 30% deduction limit based on earnings before interest, tax, depreciation and amortization to a stricter standard based on earnings before interest and tax. This change increases taxes and financing costs, especially impacting capital-intensive companies and posing a threat to jobs and economic growth.
- Full expensing: The coalition argues for the restoration of full expensing, a policy that allows businesses to deduct the full cost of equipment and machinery in the year of purchase. This policy had been in place from 2017 through 2022 but began phasing out in 2023. Full expensing is particularly important for smaller businesses, as it reduces after-tax costs and stimulates investment. The letter stresses that failing to restore full expensing will adversely affect U.S. businesses’ ability to invest and compete globally.