U.S. Sen. Shelley Moore Capito (R-WV) said Tuesday that support is growing for legislation she introduced with U.S. Sen. Kyrsten Sinema (I-AZ) to reinstate the Earnings Before Interest, Tax, Depreciation and Amortization measure.
The American Invests in Manufacturing (AIM) Act would reinstate EBITDA to incentivize businesses to make capital investments and protect American jobs, the senators said. Introduced in April, the bill has seen support grow, the law makers said as a recent study from the National Association of Manufacturers shows that failing to reverse the change from EBITDA to EBIT cost the U.S. economy 867,000 jobs, $58 billion in lost wages and $108 billion in Gross Domestic Product.
Last week, the senators said, 1,322 companies across the country, as well as industry associations, state and local chambers and allied organizations signed a letter to Congress calling on the restoration of the pro-growth tax policy. The U.S. Chamber of Commerce said the limitations the EBIT standard imposed on businesses was negatively effecting the nation’s economy.
“The U.S. Chamber of Commerce strongly supports S. 1232 / H.R. 2788, the American Investment in Manufacturing (AIM) Act,” said Neil Bradley, U.S. Chamber of Commerce Executive Vice President, Chief Policy Advisor, and Head of Strategic Advocacy. “These bills would reinstate the traditional earnings before interest, taxes, depreciation, and amortization (EBITDA) standard for calculating the limitation on the deduction for business interest expense. As of 2022, businesses have been required to calculate their interest expense deductions based on the much more stringent earnings before interest and taxes (EBIT) standard. This limitation has made all forms of business investment more costly and risks leading to reduced investment, slower job creation, smaller wage increases, and lower overall economic growth. The Chamber calls on Congress to immediately restore the traditional EBITDA standard for calculating the limitation on the deduction for business interest expense, and we urge you to cosponsor these important bills.”