Washington, D.C. - U.S. Senator Pat Toomey (R-Pa.) is doing his part to ensure that the American economy keeps growing, worker wages keep rising, and employers continue creating even more jobs.
The ALIGN Act makes permanent the full and immediate expensing provision of the 2017 tax reform law. Under the Tax Cuts and Jobs Act, full expensing begins to wind down at the end of 2022.
"Tax reform's most pro-growth feature was allowing businesses to immediately write off purchases of new equipment. It led to workers becoming more productive, which resulted in higher wages and more jobs," said Senator Toomey. "My bill to make full expensing permanent would give manufacturers and businesses of all sizes certainty around investment planning and it would keep our economy humming. I thank my cosponsors for recognizing the economic benefits of full expensing and look forward to getting this measure passed and signed into law."
Additionally, the ALIGN Act fixes an inadvertent drafting error in the tax code that prohibits restaurants, retailers, and other leaseholders from taking full advantage of the expensing rules, leading to cost-prohibitive renovation projects and stalled investments. Senator Toomey has introduced the standalone bipartisan Restoring Investment in Improvements Act with Senator Doug Jones (D-Ala.) and 60 other Republican and Democratic senators to make this particular fix. At Wednesday's Senate Finance Committee hearing, U.S. Treasury Secretary Mnuchin called this measure Treasury's "number one request to get a Congressional fix."
Economic Impact - The Tax Foundation estimates that in the long run, permanent full expensing will increase overall GDP by 0.9%, wage growth by 0.8%, capital stock by 2.2%, and full-time equivalent jobs by 172,300. More economic information on the ALIGN Act is available here.
The ALIGN Act is co-sponsored by Senators Mike Braun (R-Ind.), Shelley Moore Capito (R- W.Va.), Kevin Cramer (R-N.D.), Ted Cruz (R-Texas), Cory Gardner (R-Colo.), Jim Inhofe (R-Okla.), James Lankford (R-Okla.), Jerry Moran (R-Kan.), David Perdue (R-Ga.), Rob Portman (R-Ohio), Jim Risch (R-Idaho), Marco Rubio (R-Fla.), Tim Scott (R-S.C.), and Thom Tillis (R-N.C.). A full list of the 25 groups supporting the ALIGN Act is available here.
The full text of the ALIGN Act is available here.
Pennsylvania job creators are also supporting the ALIGN Act:
"The Tax Cuts & Jobs Act was pivotal in helping our initiative to build a new production line enabling a 16% increase to the Henry Molded Products Lebanon, PA plant capacity. Several million dollars were spent with various subcontractors, nine additional people were hired, and we created more additions to our sustainable, recyclable, packaging product line. It also helped justify a company-wide wage increase as well. Thank you Senator Pat Toomey and President Trump for enabling this boost to our independent and small business community's investment opportunities!" - Douglass C. Henry, of Henry Molded (Lebanon, Pa.).
"My family-owned company sells equipment to Pittsburgh-area manufacturers. After years of declining sales, the tax cuts - namely the lowered tax rates and the ability to expense key investments immediately, along with the 100 percent bonus depreciation - reinvigorated my customer base. These manufacturers are now growing and along with the ability to immediately expense capital investments, they are now purchasing new equipment at a faster rate. Their growth has substantially increased our sales by 69% in the two years since the tax cuts were enacted. In turn, other wins in tax reform, like the small business pass-through deduction, helped me to hire and train a new employee, buy new equipment, and develop a new service offering to better meet the growing needs of my customers. Unfortunately, these benefits expire in the coming years. I want Washington to understand the tax cuts are very important to small businesses like mine and Congress needs to make them permanent." - David Cranston Jr., of Cranston Material Handling Equipment Corp. (McKees Rocks, Pa.).
"The expensing of asset purchases provision in the Tax Cuts & Jobs Act has made the purchase of productive equipment more affordable for my company. We have furnished a new laboratory, purchased equipment needed for production, and conserved precious cash in the process. The net result has been a 30% gain in sales and 29 new jobs in the first year. And just as important, sets us up with the manufacturing capacity required for future growth." - Guy Berkebile, of Guy Chemical Company (Somerset, Pa.).