WASHINGTON, D.C. – Today, Small Business Subcommittee on Economic Growth, Tax, and Capital Access Chairman Dan Meuser (R-PA) held a hearing titled “American Ingenuity: Promoting Innovation Through the Tax Code.” Subcommittee Chairman Meuser issued the following statement after concluding today’s hearing.

“At a time when U.S. adversaries are investing more and more in innovation, Congress must reflect on the impact that removing incentives to innovation will have on our nation’s job creators,” said Subcommittee Chairman Meuser. “The repeal of the R&D Tax Credit and the sunsetting of bonus depreciation, coupled together, will have grave consequences on American entrepreneurs. Congress must fight to protect these vital provisions. We cannot continue to cede our competitive advantage and risk falling behind dangerous adversaries on the world stage. I thank our witnesses and business leaders from Schuylkill County for attending today’s hearing and sharing their stories with the Committee.”

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Below are some key excerpts from today’s hearing:

Subcommittee Chairman Meuser: “So the questions are with the type of R&D reduction, bonus depreciation reduction, the threat that we hear of the 20 percent small business income deduction, what is that doing to your business?” Mr. Bill Wydra, President, Ashland Technologies: “All of these things are compounding at the exact same time. This is just an awful time to consider, you know, going forward with the implementation of amortizing those expenses over five years. It is that little bit of extra cash flow that is going into employee development programs.” Subcommittee Chairman Meuser: “You've mentioned cash is also one of the most important parts of any of any business, particularly small business. So how is your bank?” Mr. Wydra: “It's really rough with manufacturing… You know, we've got number one, if this comes back, we're going to be shorter on cash than we would have been otherwise. And if the bonus depreciation goes away, we can no longer now, you know, really expend that additional capital into investing. You know, so with interest rates where they are right now, it's very difficult, you know, to look at doing that type of expansion, even if you can get it.”

Rep. Van Duyne: “Ms. Ballay, what do you think on global competitiveness that getting rid of these tax incentives, the TCJA and our innovation in America will do to us long term and being able to compete globally?” Ms. Julie Masser Ballay, Vice President and Chief Financial Officer, Sterman Masser Inc.: “I think it slows down how quickly we can implement, you know, business strategies. You know, and whereas in other jurisdictions, they're not being hampered quite as much. And that, you know, slowing down really, really impacts our ability to plan. You know, we're looking at, you know, one, two, three, four or five years out. We really want to plan out those expansions. And if it's uncertain what our access to capital is going to be, what our access to the cash flow is, what our tax liabilities are going to be, our ability to plan out is hampered.”

Chairman Williams: “…Can you share with us again how the bonus depreciation business affected family farms like yours and tier one and tier two suppliers?” Ms. Ballay: “You know, I had brought up our palletization and bag filling. But we've invested in higher tech harvesters. You know, for our potato operation, we've invested in combines and new plants. As you know, we've really done a very, you know, updating a lot of our equipment in the last few years.” Chairman Williams: “…And this is money that went to mainstream America, too, because you bought it from them, right?” Ms. Ballay: “Absolutely. We you know, we always look to U.S. suppliers, you know, and to go there first to try and implement in our facilities and on in our fields.”

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