Legislators will soon determine what path to take on tax reform. They should pay special attention to the negative economic impacts of a failure to extend key provisions within the Tax Cuts and Jobs Act (TCJA). The manufacturing industry directly depends on specific provisions like the business pass through deduction and the lower individual and corporate tax rates. Congress needs to act now to permanently extend the TCJA to benefit manufacturers, key players in the economy, who provide millions of jobs and support innovation.

Congress should act now to protect the TCJA and America’s manufacturing strength with it.
Courtney Silver, the president of Ketchie, Inc. a small third generation precision shop in Concord, North Carolina that creates complex parts for larger manufacturers, recently testified before the Ways and Means Committee about how the TCJA has benefited her company. Silver noted that since its enactment of TCJA in 2017, Ketchie invested nearly $1 million into new equipment, grew their workforce by 20 percent, and experienced wage growth for the first time in 15 years. Failing to extend these provisions could result in a significant increase in tax liability for American businesses like Ketchie, Inc.
According to a recent study, a failure to extend the TCJA could put 1.1 million jobs, $126 billion of U.S. employee compensation, and $284 billion of U.S. GDP at risk in multiple industries. Within the manufacturing industry, the benefits of the TCJA center around deductions like the pass through deduction. A staggering 96 percent of businesses in America are designated as pass-throughs. This deduction allows businesses to deduct up to 20 percent of their qualified business income, reducing their total taxable income. A majority of manufacturers have noted that the loss of this deduction will harm their ability to grow and innovate.
In addition to the pass-through business deduction, lowered marginal tax rates for individual filers need to be extended. The T...