Rep. Estes Addresses Inflation, Economy in Rules Committee
Washington, August 10, 2022 | Roman Rodriguez (316-262-8992)
WICHITA – Rep. Ron Estes (R-Kansas) appeared before the House Rules Committee to offer a bipartisan amendment to the so-called Inflation Reduction Act. During his remarks, he also addressed today's Consumer Price Index report and the Senate-passed legislation.
Rep. Estes' proposed bipartisan amendment would allow an extension for research and development expensing tax credits though the end of 2025. R&D is vital for long-term economic growth and keeps the United State globally competitive in innovation.
Thank you, Mr. Chairman and Ranking Member Cole, and thank you to the Rules Committee for considering my amendment.
I want to talk today about amendment 42 which highlights how we need to focus on the economy. This morning we learned that inflation is still rampant and hurting families. The White House tries to spin this as good news and proof that inflation is easing, but Kansas families are still spending of 8.5 percent more today than they were a year ago, and that’s on top of the 5.4 percent inflation from July 2021.
Everyday expenses and necessities are up for family members – milk is up 15.6 percent, eggs are up 38 percent, baby food is up 15 percent, bacon is up 11 percent, and gas is up 44 percent.
But here’s one of the worst statistics from today – real average hourly wages are down 3 percent.
So President Biden and Democrats are in this bubble trying to push the narrative that it’s a strong economy, but Americans aren’t buying it because they can’t afford it.
As members of the Rules Committee and representatives of your respective districts, I’m sure you’ve heard from your constituents – these price increases and the impact they’re having on their paychecks are crushing them. The American economy is suffering, and the policies from the majority are destroying the American Dream.
So in response, the House is now going to consider this highly partisan bill that doubles down on the policies that got us here – more spending on theses bad priorities.
The bill – the so-called Inflation Reduction Act – doesn’t really reduce inflation according to the Penn-Wharton Budget Model and the Congressional Budget Office. Instead it increases taxes, increases spending and continues to increase inflation and hand strings the economy.
So how can we make this better? How can we actually improve the lives of Kansans and Americans across the country?
We can start with some bipartisan, common sense amendments like the one I’m introducing today – amendment 42.
My amendment is a temporary extension of the research and development (R&D) expensing tax credit through the end of 2025.
Research and development are key for short-term and long-term economic growth in our country, and immediate expensing of R&D costs will boost R&D here in the United States.
We know that where R&D occurs is critical for job creation and job growth.
In the case of R&D tax implications, full expensing was allowed through 2021. However, starting this year, businesses will be required to spread out or amortize R&D expenses over a period of five years for domestic R&D or 15 years for foreign R&D.
This spreading out of expenses will significantly diminish the near-term value and likelihood of research investments, making us the only developed country requiring R&D expenditure amortization.
In 2020, the Tax Foundation said immediate expensing of all investments, including R&D expensing, is the number one federal reform Congress can take to encourage economic recovery after COVID-19.
I’ve introduced and reintroduced a bill with Democratic Congressman John Larson from Connecticut – the American Innovation and Competitiveness Act – to allow companies to immediately expense R&D permanently. While I believe we should still move toward a permanent solution, my amendment today would at least provide some certainty to American job creators, innovators and workers for the next few years.
The National Taxpayers Union has called my bipartisan bill a “no-brainer” for passage, and I think the amendment today should be a no-brainer as well.
Today’s R&D dollars create tomorrow’s jobs, and we need to keep R&D dollars inside our country where they will help strengthen American businesses, workers, our economy and helps create more jobs for Americans.