Corporate Tax Reform bill will benefit IPC members
U.S. federal tax policy heavily influences all U.S. businesses, including manufacturing. Given the importance of this issue, IPC’s government relations team is very active on matters of U.S. tax policy. With input from our members, and on their behalf, IPC advocates for corporate tax rates and incentives that stimulate business growth and investment.
In December 2015, years of advocacy by IPC and other business groups gave way to legislative victory when Congress enacted, and President Barack Obama signed, a tax package known as the Protecting Americans from Tax Hikes Act, or PATH Act.
The PATH Act extended more than 50 tax policy provisions that had expired on December 31, 2014, including several that IPC members have long supported. In particular, the legislation codified a permanent extension of the R&D tax credit – a significant victory for IPC and all manufacturing and technology industries. Other elements of the PATH Act of interest to IPC members include the extension of provisions concerning:
- Bonus depreciation
- Gains on certain small business stock
- The Work Opportunity Tax Credit
While IPC applauds Congress and the President for protecting tax law that helps keep U.S. manufacturing competitive, a more comprehensive tax reform bill is expected this coming year.
Passing the PATH Act was a critical first step, as it could make it easier for Congress to lower corporate and individual tax rates in the next reform bill. House Ways and Means Committee Chairman Kevin Brady (R-TX) has publicly said that he would like to lower the corporate tax rate from 35 to 20 percent; encourage the repatriation of offshore corporate profits; and raise the R&D tax credit from 14 percent on qualified research expenses to 20 percent.
IPC’s engagement in the debate surrounding this proposed action and other tax reform remains critical.
The PATH Act represents no small victory for IPC’s member companies, but it could prove just a preliminary clash before a much larger battle surrounding corporate tax reform.
The IPC government relations team will continue to amplify the voice of our members, ensuring that they are heard throughout the critical debates this year and beyond.
For a more in-depth analysis of the key provisions of the PATH Act for IPC members, visit IPC’s issue brief on U.S. corporate tax reform.