alliantgroup CEO Dhaval Jadav was recently featured as a guest writer in Reuters Breakingviews, a publication that provides agenda-setting financial insight. In his article, Built to order, Jadav discusses the need for tax reform for U.S. manufacturers to reinvest money back into the U.S. economy.
The Invent and Manufacture in America Act, a bill introduced in June 2017, is one example that Jadav explains would help more American businesses financially. This act would provide a tax cut to companies that not only conduct U.S.- based research and development, but also manufacture products from this R&D domestically. These companies, if eligible, can receive upwards of hundreds of thousands of dollars in tax savings.
Jadav also suggests that changes like the Invent and Manufacture in America Act would improve on the long-term decline in U.S. manufacturing. Over time, U.S. companies have separated manufacturing from R&D — more than 5 million jobs and 70,000 factories have closed or moved overseas since 2000. If signed into law, the bill would encourage companies to keep their research and manufacturing side-by-side in America, a tactic that has previously helped to improve productivity.
According to Jadav, the Invent and Manufacture in America Act would be the latest in a line of pro-business changes. Traditionally, larger companies with more than $250 million in annual revenue benefit disproportionately from the existing R&D tax credit. More recently; however, the IRS and the Treasury Department have announced changes to eliminate hurdles for small and mid-size businesses, who often forgo the R&D credit due to the complex process for qualifying.
“Put it all together, and the proposal would be a solid step in the right direction to help a manufacturing sector looking to revitalize itself, as it and other American companies await broader changes to the U.S. tax code”, wrote Jadav.
To learn more about the Invent and Manufacture in America Act and other tax reform changes for U.S. manufacturers, read Jadav’s full article here.