Letter to the Editor: Congress must protect pro-manufacturing tax policy

Dear editor,

Manufacturers across Missouri are standing at a crossroads. At the end of this year, key provisions of the 2017 Tax Cuts and Jobs Act are set to expire. That may sound like a Washington technicality, but for Missouri manufacturing workers, businesses and communities, it’s a moment of real consequence.

Sustaining this manufacturing strength requires a competitive tax policy – and we’ve already proven what works. The TCJA delivered results by reducing corporate tax rates and allowing immediate expensing for capital investments instead of forcing companies to spread costs over years. This straightforward reform eliminated financial barriers, enabling manufacturers to hire more employees and raise wages, invest in equipment, grow their businesses and contribute more to their communities.

Consider DT Engineering in Lebanon, a manufacturer of industrial automation equipment. Thanks to savings from the TCJA, DT Engineering reinvested directly in its workforce and operations, including a partnership with Ozarks Technical Community College’s advanced manufacturing center. This collaboration gave students hands-on experience with cutting-edge technology while helping secure the company’s future as a domestic engineering and manufacturing operation. The 20% pass-through deduction was a key factor in enabling DT Engineering to invest in its employees, equipment and community. Losing that provision would deal a serious blow to manufacturers like DT across Missouri.

The good news? There is a solution on the table: the “One Big Beautiful Bill Act.” This legislation, which has been crafted and championed by Missouri’s own Congressman, House Ways and Means Chairman Jason Smith, includes policies that would prevent damaging tax hikes by preserving the pro-growth provisions of the TCJA and ensuring manufacturers in Missouri and across the country can continue to invest, innovate and grow.

The Senate Finance Committee’s draft tax title of the OBBBA, passed by the House, includes polices that matter deeply to Missouri’s manufacturing base – large and small. It restores full expensing for capital equipment, allowing manufacturers to purchase the machinery they need to grow. It makes permanent immediate research and development expensing, a vital tool for companies working on cutting-edge technologies here in the U.S. It also restores a more favorable interest deductibility standard, ensuring businesses can finance new projects without being penalized by an unpredictable tax code.

Why does this matter in Missouri? Because our state is home to nearly 278,000 manufacturing workers across over 5,000 manufacturing establishments. These businesses are often the bedrock of our rural towns and urban communities alike, supporting not only workers but also the suppliers, service providers and small businesses that depend on a thriving industrial sector.

If Congress fails to act, nearly 6 million American jobs will be lost, according to data from the National Association of Manufacturers, including 108,000 jobs, $9.8 billion in employee wages and $19.6 billion in lost economic activity right here in Missouri.

 Let’s be clear: This is not about tax cuts for the sake of tax cuts. It’s about building a stable, competitive tax environment that gives Missouri manufacturers the certainty they need to hire more workers, raise wages, invest in new technologies and outcompete countries like China. It’s about keeping Missouri’s economy strong, resilient and growing.

Congress has an opportunity to stand with Missouri’s manufacturers by preserving crucial manufacturing priorities in the OBBBA and getting a bill to the president’s desk by July 4, giving manufacturers the certainty they need for long-term planning.

The time for action is now. Missouri can’t afford to wait.

—Ray McCarty, president of the Associated Industries of Missouri; Jim Sheldon, CEO of DT Engineering; and Jay Timmons, president and CEO of the National Association of Manufacturers