As Congress continues its work on the fiscal year 2024 appropriations process and associated tax provisions, it should consider an often-overlooked tax provision: the limitation on deductions companies take for interest payments.
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Tighter Limits on U.S. Interest Deductibility Make U.S. an Outlier and Increase Pain of Rising Interest Rates
While there is disagreement about the amount of interest that should be deductible, it’s clear that the limit based on EBIT makes the U.S. an outlier compared to other countries across the OECD while raising the cost of new investment.
Three upcoming tax law changes scheduled by the 2017 Tax Cuts and Jobs Act (TCJA) to help offset its revenue losses would be canceled by proposed legislation that would prevent the tax treatment of investment from worsening over the coming years.
Learn more about the recent Alabama tax reform measures (House Bill 170), which combines pandemic-era tax policy responses with broader tax policy reforms.