S.559 - American Investment in Manufacturing and Main Street Act; AIMM Act (119th Congress)
Summary
S.559, the American Investment in Manufacturing and Main Street Act (AIMM Act), proposes a permanent extension of the allowance for depreciation, amortization, or depletion when calculating the income limitation on business interest deductions under Section 163(j) of the Internal Revenue Code. This amendment would apply to taxable years beginning after December 31, 2021. The bill aims to incentivize investment in manufacturing and main street businesses by easing tax burdens related to business interest expenses.
Expected Effects
The primary effect of this bill is to provide businesses with a more favorable tax environment by making permanent a provision that allows for greater deductions of business interest expenses. This could lead to increased investment and expansion, particularly for capital-intensive businesses. By reducing the tax burden associated with borrowing, the bill may encourage businesses to undertake new projects and create jobs.
Potential Benefits
- Encourages business investment by reducing the cost of borrowing.
- Simplifies tax planning for businesses by making the allowance permanent.
- Potentially stimulates economic growth and job creation in manufacturing and main street sectors.
- Could improve the financial health of businesses by increasing available capital.
- May lead to increased competitiveness of American businesses.
Most Benefited Areas:
Potential Disadvantages
- Could increase the national debt if not offset by other revenue increases or spending cuts.
- May disproportionately benefit larger, more capital-intensive businesses.
- Potential for increased tax complexity if the provision interacts with other parts of the tax code in unforeseen ways.
- May not significantly impact businesses that are not highly leveraged or capital-intensive.
- Possible inflationary pressure if increased investment is not matched by increased productivity.
Most Disadvantaged Areas:
Constitutional Alignment
The bill falls under the purview of Congress's power to lay and collect taxes, duties, imposts, and excises, as outlined in Article I, Section 8, Clause 1 of the Constitution. The bill aims to promote the general welfare by stimulating economic activity, which aligns with the principles stated in the Preamble. However, the Constitution does not explicitly address the specifics of tax deductions or depreciation allowances, leaving Congress with broad discretion in this area.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).