Tax Policy

To maintain our nation’s global competitiveness, U.S. federal tax policy must retain the key pro-growth aspects of the Tax Cuts and Jobs Act of 2017 (TCJA). Prior to the enactment of that law, U.S. manufacturers and other businesses were subject to a combined (federal plus state) tax rate of almost 40 percent — the highest in the world. In addition, the pre-TCJA tax code failed to include adequate provisions to encourage capital investment and innovation in the manufacturing sector. The TCJA addressed these fundamental challenges for the U.S. economy by lowering the corporate tax rate to 21 percent and by providing for critical cost recovery systems such as 100 percent accelerated depreciation for capital investments and full expensing of research and development expenditures.  

While the lower corporate tax rate remains in place, many of the key cost recovery provisions of the TCJA have expired or are being phased out. Maintaining or lowering the 21 percent corporate tax rate and restoring key cost recovery provisions are critical, as capital investment is crucial for economic growth and job creation in the American steel industry and the manufacturing sector. Accelerated depreciation and full expensing directly impact whether or not manufacturing companies will make new investments and are therefore particularly important for American steel producers.  

AISI urges the new administration and Congress to enact the following tax provisions into law in 2025: 

• Corporate tax rate – In order to ensure U.S. industry competitiveness with businesses from around the world, maintain or lower the current U.S. corporate tax rate of 21 percent to keep it in line with the average global corporate tax rate. In addition, repeal the corporate alternative minimum tax (AMT) of 15 percent that was enacted as part of the Inflation Reduction Act of 2022. 

• Accelerated cost recovery — Restore provisions to promote domestic capital investment, such as 100 percent accelerated depreciation, full expensing of business capital expenditures, or other measures that lower the cost of capital and allow businesses to deduct costs associated with capital investment, as the TJCA provisions are being phased out.  

• Expensing of research and development (R&D) costs — Reestablish full first-year expensing of domestic R&D costs to spur continued innovation in the United States. This feature of the TCJA expired in 2022. 

• Interest deductibility — Renew the allowance for depreciation, amortization and depletion in calculating the limitation on business interest deductibility. This will allow businesses to deduct their true expenses related to financing.  

• Percentage depletion – Maintain the current percentage depletion tax deduction as it applies to iron ore and metallurgical coal, two key raw materials used in integrated steelmaking. 

• Key business tax credits — Maintain tax credits that incentivize investment and production of wind, solar, nuclear, hydrogen, carbon capture and advanced manufacturing facilities, with appropriate bonus provisions for domestic content. Expand the advanced manufacturing production credit to incentivize transformer production and the use of domestic electrical steels, and to cover high-nickel scrap. Establish parity between carbon capture tax credits for utilization and sequestration.