For the first time in 30 years, Congress has passed a major overhaul of the tax structure, especially for businesses. Spurred by the desire to kick lagging economic growth into a new gear, Republican leaders in Congress joined with the White House and key economic advisors to persevere through a tumultuous political environment to accomplish what many in Washington thought couldn’t be done. It also important to note that under the leadership of the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM), the business community in Washington, by and large, kept their collective eye on the big prize rather than disintegrating into narrow provisions and carve-outs.
Despite the many turns to get to passage, the tax package that was signed into law was remarkably simple and clean. The champions in Congress stuck to several core principles, such as slashing corporate and small business taxes, doubling the standard deduction that will simplify filing taxes for millions of working Americans, and providing significant incentives for capital projects, as well as research and development. Overnight, American companies went from the highest tax rates in the world to among the lowest. According to NAM, this is a dream tax bill for manufacturers.
While each baker and supplier will be determining the exact impact and opportunities for his or her company, in aggregate, the package will have tremendous benefit. The immediate write-off of the full cost of new equipment alone will likely boost additional investment in new plants and equipment. The reduction in corporate rates should provide resources to address many workforce challenges.
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