Tax package will support our families, farmers, and businesses

The number and severity of unprecedented challenges our nation faces are growing at a time when our capacity to address them is declining.

Economically, Americans continue to see their cost of living rise relentlessly in the face of inflation. Homeownership is increasingly unaffordable for most Americans, with 99% of America’s counties seeing a new peak in housing costs as climbing interest rates and a lack of housing supply make buying a home, or even renting one, increasingly out-of-reach.

At the same time, America faces intense global competition, and China is aggressively pursuing its goal to supplant the United States as the world’s largest superpower. China has monopolized critical supply chains, which creates severe vulnerability for not only our economy, but also our national security. With the overwhelming majority of critical minerals (used in everything from iPhones to F-16s) processed in China, they could drive our economy into crisis overnight should they choose to do so.

Inflation, housing costs, supply chain risks, and the threat posed by China are only a few examples of our current challenges. Despite this, the Biden administration has been unable to rise to the occasion and deliver for the American people.

It's time for action. That’s why I recently voted for the Tax Relief for American Families and Workers Act, which will help address these problems, grow our economy, and support our families, farmers, and businesses.

The bill is aptly named, because it directly targets two of the most significant sources of expenses for America’s families – the costs of housing and the costs of raising a child. This bill lowers taxes for families and ensures that parents can keep more of their hard-earned money to buy gas and groceries, purchase everyday necessities, and educate their children. It also maintains strong work requirements for folks to claim the child tax credit. At the same time, this legislation improves the affordable housing credit, an effective tool for building more housing and helping correct the housing shortage that’s making homeownership unaffordable. Inflation has continued to rise, and housing costs accounted for more than half of the rise in the Consumer Price Index in recent measures.

Primarily, our current competition with China is economic at its core. For nearly a century, America has had the world’s largest and most innovative economy. But China has known that to truly compete with us, they need to compete at the frontiers of technological innovation. They’ve aggressively pursued policies to encourage R&D in China while our own policies have gone the opposite direction, and the results of that are evident in everything from their rapidly advancing military technology to the spread of the social media app, TikTok. This bill reverses that trajectory by restoring immediate R&D expensing.

This change alone is critical to maintaining our global economic and technological leadership and corrects the self-imposed disadvantage we’ve given American businesses by making our R&D tax incentives less competitive than China’s and those of most other countries around the world. In fact, by supporting domestic R&D investments, this legislation will preserve over 1,200 jobs in Iowa and support $104 million in wages for our workforce.

But researching and developing the technology isn’t the end of the story, because we then need to deploy it here in America. When a business purchases a new piece of equipment, they can deduct a portion of that expense from that year’s taxes. By allowing them to deduct the full amount of that expense in that year, it becomes significantly easier for them to invest in the technologies that they need to stay at the cutting edge. This bill makes that correction and restores 100% “bonus depreciation.”

This change is going to be necessary for companies to domesticate our critical supply chains. We can build the mining and processing capacity for critical minerals that China has spent decades monopolizing, but it’s going to take a lot of investment in the equipment necessary to do that. By making it easier to both develop and deploy the technologies needed to onshore these supply chains, the tax bill takes an important step towards fixing the ticking time bomb that is our current supply chain dependency on China.

There will be a lot more work to do beyond this bill, but these policy changes are an important step in addressing many of our most serious challenges. The bill does this without contributing to another crisis we face – the national debt. It is entirely paid for and won’t increase the federal deficit.

The Tax Relief for American Families and Workers Act is our chance to deliver for Americans and start addressing our most serious challenges. It’s time for Washington to stop sitting on its hands and get this bill signed into law.

This op-ed was originally published in the Northwest Iowa Review on March 11, 2024.