The effort to boost the domestic economy continues as a new bill is introduced to support American manufacturing. This time, the tax credit isn’t targeting businesses or corporations; it’s for consumers.
The Made in the USA Tax Credit Act, introduced by Ro Khanna (California) and Debbie Dingell (Michigan), is proposing up to $5,000 in tax credits for shopping American made.
The Made in the USA Tax Credit Act
The new bill was announced in February 2024 and aims to encourage consumers to purchase American made goods. The expectation is that this will create a cascading boost to the nation’s economy by supporting American manufacturing and creating new jobs.
The bill could reimburse buyers up to $2,500 for single filers, and for joint filers, the credit could total $5,000. However, there are conditions to receiving this benefit. To be eligible, there is an income cap: $125,000 for single filers and $250,000 for joint filers, plus some limitations on annual investments.
There are specifics around purchases that would qualify for the credit. The bill excludes big businesses (those with over 500 employees) and products such as luxury items, firearms, vehicles, and tobacco. This means the businesses that qualify are small companies: the mom and pop shops, startups, and local brands.
The driver behind this bill is the need to stimulate our national economy at the consumer level. There are already bills in place to encourage big businesses to source materials and labor locally and conduct their manufacturing in the US. Now, this credit comes with the average consumer in focus.
The Representatives
There is plenty to disagree on when it comes to politics, but one topic that most can get on board with is supporting domestic businesses. Representatives Debbie Dingell and Ro Khanna are the two cosponsors of the Made in USA Tax Credit Act.
Representative Dingell stated, “Investing in American manufacturing drives innovation, prosperity, and progress.” Representative Khanna added, “This bill will make items more affordable for consumers and help support American businesses and workers.” They both agree that larger policies need to be restored for the greater good of strengthening domestic manufacturing.
The Future of the Bill
Although the Made in the USA Tax Credit Act is really exciting for most consumers, it isn’t law yet. So far, it has only been introduced to the House Committee on Ways and Means. Now, the bill must continue through approvals in the House, Senate, and finally go on to get President Biden’s stamp of approval. Only after that will the bill become law.
The Tax Credit Act has a long way to go, to say the least. Unfortunately, the prognosis for the bill becoming law is grim. This isn’t necessarily due to the content, but rather history. According to Govtrack.us, “only 11” of bills made it past committee, and only 2% were enacted in 2021-2023.” However dismal the long-term outlook, the fact that our politicians are making these efforts is a win for now…and hopefully, that win turns into dollars later.
