CO-SPONSORSHIP of the Accelerate Long-term Investment Growth Now (ALIGN) Act (S. 3296)

The Accelerate Long-term Investment Growth Now (ALIGN) Act (S. 3296 / H.R. 6802), introduced by Sen. Pat Toomey (R-Penn.) and Rep. Jodey Arrington (R-Texas), would make permanent one of the most pro-American worker, pro-growth policies contained in the Tax Cuts and Jobs Act (TCJA): full and immediate expensing.

Full and immediate expensing, which under current law is set to begin phasing out at the end of 2022, allows businesses to deduct the entire cost of domestic capital investments—such as machinery and other equipment—from their taxable income. This creates a tax-free entrepreneurship environment that encourages new, long-term business investment leading to more jobs and higher wages for American workers. According to Adam Michel, Senior Policy Analyst at The Heritage Foundation:

Expensing is not just a business tax cut; expensing is fundamentally pro-worker. Expensing lowers the tax costs of new investments, which allows businesses to expand and upgrade their facilities and equipment, which leads to more jobs, better technology, and gains in productivity, all of which boosts wages.

Because expensing primarily applies to new investment, it produces long term economic growth more than any government subsidy ever could. According to a study by the Tax Foundation, making the TCJA’s expensing provision permanent would increase GDP by 0.9 percent, wage growth by 0.8 percent, capital stock by 2.2 percent, and full-time equivalent jobs by 172,300. When paired with making the rest of the TCJA permanent, The Heritage Foundation estimates permanent expensing would increase the projected growth from the original reform by about 60 percent.

Helping boost American business investment and worker’s wages, particularly at a time of economic crisis like this, should be a bipartisan goal. Lawmakers on both sides of the aisle should work together to pass the Accelerate Long-term Investment Growth Now (ALIGN) Act.