OPINION:
The 2017 Tax Cuts and Jobs Act was transformational. It made America more competitive by driving unprecedented investments in manufacturing and giving working families a much-needed raise by lowering their tax burden. Congress once again has an opportunity to invest in our workers and make America into a manufacturing powerhouse. Passing the One Big Beautiful Bill Act will make historic investments in Americans, driving even greater investment into our country and creating jobs. Our workers, our communities and our economy will all benefit.
The domestic steel industry is vital to our economy. It built America and America’s middle class. Steel mills are anchors for many communities. The mills are often the largest employers and, in many areas of the country, offer the best wages and benefits. For instance, in Mississippi County, Arkansas, steelworkers average just over $116,000 annually, significantly more than the county’s overall average salary of $69,000 across all industries. The higher salaries mean that mills have a greater economic impact than many other employers. The One Big Beautiful Bill Act will end taxes on overtime pay, which will supercharge every steel mill’s impact. Steelworkers will have more money in their pockets that can contribute to a renaissance of their local communities. Increasing steelworkers’ take-home pay will have a ripple effect as every steel job creates about seven additional jobs in areas as diverse as construction, maintenance and the service sector. These investments will strengthen communities surrounding the mills.
In addition to ensuring greater financial security for steelworkers and stimulating local economies, the One Big Beautiful Bill Act will boost manufacturers. America’s manufacturing sector built our country into a global economic powerhouse. However, over time, high corporate tax rates helped drive manufacturing overseas. The Tax Cuts and Jobs Act lowered the corporate rate from 35% to 21%, which encouraged many manufacturers to reshore their jobs. Lowering the corporate rate led companies to increase domestic investment by approximately 20%, which led to increased wages across the country. Maintaining a competitive corporate rate is vital to our manufacturing competitiveness. Of course, the corporate rate alone does not ensure positive investment decisions. It needs to be combined with other incentives that allow manufacturers in America to maintain and build on their competitive advantages.
One of the most important aspects of the Tax Cuts and Jobs Act was the immediate expensing of capital equipment. To manufacture more in America, you need more manufacturing equipment. The Tax Cuts and Jobs Act allowed manufacturers to immediately deduct the full cost of equipment and machinery in the same year it was placed into service instead of depreciating them over time. That provision is scheduled to expire, making it more costly for manufacturers to procure the equipment necessary for transformational investments. For instance, Nucor Steel is under construction on the largest investment in West Virginia history. Nucor’s state-of-the-art mill in Apple Grove would be more costly if the company could not fully deduct the cost of the equipment. Investment decisions hinge on several factors, and drastically increasing costs for equipment can keep a project from moving forward. Renewing immediate expensing and making it permanent will help ensure that domestic manufacturers can procure the necessary equipment for manufacturing investments that strengthen families and communities across the country.
Another important aspect of the One Big Beautiful Bill Act is the immediate expensing of research and development costs. America’s steel industry is a global leader largely because of our technological advantage. We let markets choose the most efficient technologies and raw materials. In contrast, most imports that enter the United States use older technology. America has long been the global leader in innovation, but numerous other countries are catching up quickly. For instance, the European Union has a program called Horizon Europe, which has a budget of $109 billion to boost innovation. Renewing immediate expensing for R&D costs and making it permanent will ensure that we maintain our competitive edge when we need it most.
The Tax Cuts and Jobs Act helped make our economy the envy of the world. Congress should act swiftly to invest in American workers and manufacturing by passing the One Big Beautiful Bill Act.
• Brandon Farris is the vice president of government affairs at the Steel Manufacturers Association.
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