Rep. Mike Kelly on Tax Cuts and Jobs Act's Impact on American Manufacturing

The Tax Cuts and Jobs Act of 2017

• 💡 The Tax Cuts and Jobs Act (TCJA), launched in 2017, aimed to make American companies profitable again and encourage them to stay or return to the US.
• 📈 Despite rate reductions, the act led to an incredible increase in tax revenue, demonstrating that the math worked.
• 🎯 The goal was to prevent American companies from moving overseas due to perceived lack of profitability, thereby keeping jobs and investment in the US.

International Tax System Reforms

• 📉 The previous international tax system was damaging, punishing companies for being in the US and making it difficult to bring foreign-earned profits home.
• 🧠 Changes in the international tax code created incentives to bring research, intellectual property, and manufacturing back to the United States.
• 📊 Companies that benefited from the TCJA saw an average investment growth of 20% and retained more intellectual property revenue in the US.

Impact on Manufacturing and Investment

• 🏭 Tech companies reported bringing intellectual property and advanced manufacturing back to America or developing new IP kept within the US.
• 🌍 These benefits allowed companies to do more manufacturing, innovation, and investment, enabling them to compete and win globally.
• 🤝 The committee has observed how different parts of the international tax code interact, leading to improvements that make it easier for companies to invest and be global hubs.

Business Perspective on Tax Policy

• ✅ The TCJA laid a foundation for a more competitive tax code for US manufacturers.
• 💰 Modifications to expense allocation in subsequent legislation have been crucial, removing a double taxation burden and allowing companies to get credit for foreign taxes paid.
• ⚖️ Consistency and certainty in tax policy are vital for businesses to make informed decisions about where to invest capital and workers.