R&D Changes to Federal Tax Code
Floor Speech
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Mr. COURTNEY. Mr. Speaker, I want to take a minute this morning to again look at the 118th Congress, which just completed its first year of operation last December, and it was sadly the least productive Congress in memory.
Thirty-one bills were enacted during that first year of the 118th Congress. Again, that is a fraction of the number of bills that have been introduced in this Congress. That now surpasses 7,000 bills which were introduced in the House and a comparable number in the Senate.
Obviously, much of the year was consumed with a lot of interparty fighting with the majority party, but now with really a year left, it is our duty to try and find bipartisan measures that are actually going to help this country and address real problems for Americans.
The good news is, a week ago Friday, the Ways and Means Committee reported out H.R. 7024, which is a bill aimed at making corrections and improvements to the Tax Code that are long overdue.
There are three basic pieces to it.
Number one, it reinstated the child tax credit, which had been wiped out after ARPA expired. This will basically take roughly half a million children out of poverty. Low-income families don't qualify for the full value of the child tax credit. Thankfully, the two sides came together to come up with a meaningful fix. We really have more work to do, because the initial version that was part of ARPA actually cut child poverty in this country in half.
The second thing it did is it expanded the low-income housing tax credit. We have a desperate need for more housing supply in this country, and this will stimulate more investment by developers to build more housing.
I want to be clear. Those units that will benefit from this will be mixed income and will benefit working families and folks who are desperate to find affordable places to live.
Mr. Speaker, what I really want to talk about is the research and development tax deduction, which, in 2017, when the tax law was passed, which I opposed at the time, it basically took the research and development expensing mechanism that had been on the books since 1954, which allowed businesses to write down the investments that they did in new products, processes, workforce innovation, and basically forced them to have to spread it out over 5 years, causing a huge hardship for small businesses, particularly small manufacturers.
I have a poster next to me from the Westminster Tool company in Plainfield, Connecticut. I visited it a few days ago. This is a firm with 35 workers. Again, a family-owned business. They do great work in terms of medical device manufacturing. They also make aerospace parts that go into our F-35 program that is so critical to the Air Force and the Navy.
When this new expensing mechanism went into effect, it is almost hard to believe this, but their tax bill went up 355 percent. Again, for companies like this, who don't have cash reserves to continue innovating in terms of new products and processes, which Westminster Tool does, this is basically a wipeout in terms of their ability to invest.
This is showing up across the country. It was a terrible decision back in 2017. This bill will resume having the annual expensing mechanism, which will allow this company--and this is a picture with Ray Coombs, who is to my immediate right there, the owner, and his two daughters and his son, Colby, who are running the business. Behind him is the president of the Eastern Manufacturing Alliance, which has been desperately asking Congress to go back and fix this ridiculous change which took place in the 2017 tax bill.
So, again, this is a pro-growth measure, which is going to allow companies like this to get back on track in terms of innovation, which is so important for us in keeping ahead of our global competitors and creating jobs--good jobs, skilled jobs. Westminster Tool has been just an absolute shining example of why we need to make this change.
Hopefully, we are going to get this across the finish line and make sure that, again, the problem is fixed. We could do more; there is no question about it. But the fact of the matter is, in this Congress, we have to take Ws where we can and victories where we can to address real problems for companies like Westminster Tool.
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