WASHINGTON, D.C. – U.S. Senators Shelley Moore Capito (R-W.Va.) and John Barrasso (R-Wyo.) recently introduced pro-growth legislation to boost investment in American manufacturing and help small businesses, farmers, and ranchers purchase the equipment and supplies they need to build their operations and support their employees.

The Growing America’s Small Businesses and Manufacturing Act will reduce tax bills for business owners looking to purchase equipment—including machinery, farming equipment, energy infrastructure, building upgrades, commercial vehicles, mining equipment, and more. This will free up resources to go toward employee salaries, materials, and other critical business expenditures.

“West Virginia’s manufacturers and small business owners are the backbone of our economy,” Senator Capito said. “The Growing America’s Small Businesses and Manufacturing Act will give them the tools they need to compete, grow, and hire. By allowing greater investment in equipment and operations, this bill strengthens our global competitiveness and supports the hardworking Americans driving innovation and economic growth across the country.”

“Wyoming’s small businesses are what keeps our economy going strong. We want to make sure they have every opportunity to succeed,” Senator Barrasso said. “Right now, they face an uphill battle with high prices and a mountain of new regulations. The Growing America’s Small Businesses and Manufacturing Act will go a long way in helping Wyoming’s farmers, ranchers and small businesses expand their operations, better compete and hire more workers.” 

“Manufacturers are driving the economy by investing in job-creating projects and cutting-edge equipment and machinery. The Growing America’s Small Businesses and Manufacturing Act would incentivize and support these important investments by reducing the cost of capital equipment purchases and the debt financing that makes them possible. Manufacturers commend Sens. Barrasso and Capito for their leadership in introducing this bill, and we encourage Congress to include these policies in comprehensive legislation that preserves and extends pro-manufacturing tax provisions from the Tax Cuts and Jobs Act,” Charles Crain, Managing Vice President of Policy, National Association of Manufacturers (NAM), said.

“Doubling the small business expensing threshold (Section 179) will be a huge win for small employers. This will allow small businesses to make significant capital investments which will help to grow the Main Street economy. NFIB applauds Senators Barrasso and Capito for introducing this important legislation,” Jeff Brabant, Vice President, Federal Government Relations, National Federation of Independent Business (NFIB), said.

“America's economic security relies on a strong manufacturing sector and small business growth. The “Restore American Investment Now” (RAIN) Coalition applauds Senators John Barrasso (R-WY) and Shelley Moore Capito (R-WV) for introducing the Growing America’s Small Businesses and Manufacturing Act, which restores the EBITDA standard for business interest deductibility. Restoring the EBITDA standard will help businesses to invest, grow, and create jobs. We thank the Senators championing this pro-growth legislation to strengthen American manufacturing, support small business expansion, and create more opportunity for American workers,” Michael O’Rielly, Spokesman, RAIN Coalition, said.

“Tax policy plays a critical role in the restaurant industry’s success. Pro-growth policies ensure that restaurant owners can continue investing in their businesses - upgrading equipment, expanding dining rooms, and creating jobs. With economic uncertainty beginning to slow spending, restoration of the critical interest expense deductions and small-business expensing are top priorities for our members. We appreciate Sens. Barrasso and Capito’s continued support of restaurant operators and small business owners and hope that Congress will include these important policies in any tax package they pass this year,” Sean Kennedy, Executive Vice President, National Restaurant Association, said.

BACKGROUND:

The Growing America’s Small Businesses and Manufacturing Act delivers two pro-growth tax proposals that will boost investment in capital-intensive industries like manufacturing, energy production, and agriculture.

Expanded Business Interest Deduction:

  • The bill revises the limitation from 30% of a business’s Earnings Before Interest and Taxes (EBIT), back to 30% of Earnings Before Interest, Taxes, Depreciation, Amortization, and depletion (EBITDA).
  • This protects businesses from being punished for investments in machinery, capital equipment, mining, drilling, and research and development (R&D).

Enhanced Small Business Expensing:

  • The second provision expands Section 179, which allows taxpayers to deduct the cost of certain business assets in the year they are purchased rather than depreciating them over time.
  • Under the 2017 Tax Cuts and Jobs Act, the maximum deduction amount was increased to $1 million from $500,000, helping small businesses acquire the equipment needed to expand operations.
  • The bill builds on this success by lifting the deduction cap to $2.5 million, accelerating small businesses’ access to capital.
  • The provision covers a wide range of eligible expenses, including machinery, mining tools, farming implements, energy production equipment, commercial vehicles, building upgrades, and other critical investments.

Full text of the legislation can be found here.

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