The decade's most triggering comedy
On Wednesday, in the midst of the supply chain crisis that has plagued American consumers with empty store shelves, Rep. Chip Roy (R-TX) introduced the “BEAT CHINA Act,” a bill to “bolster domestic manufacturing and reduce America’s overdependence on global supply chains.”
Roy issued a statement saying:
As long as we depend on China and the rest of the world to keep our shelves stocked, our economic prosperity, our political liberty, and our national security are all in grave danger. Relying too heavily on supply chains based in other countries is a recipe for disaster — especially when the governments of those countries wish to destroy our way of life, as does the Chinese Communist Party. We must take bold action, consistent with the spirit of free enterprise, to reduce our dependence on foreign supply chains. The American people deserve an economy that can provide for itself; that’s why I am proud to reintroduce the BEAT CHINA Act, which would extend tax advantages to any foreign manufacturer that moves its production to the U.S.
Roy’s website explains:
This bill encourages reshoring by providing the tax advantages to manufacturers that move to the U.S. from abroad:
Non-residential real property purchases by qualifying manufacturers would be considered 20-year property instead of 39-year property, making the property eligible for full and immediate expensing, or “bonus depreciation.”
This bill would also make full and immediate expensing permanent. Under the Tax Cuts and Jobs Act, this provision in the tax code is currently set to phase out after 2022.
Qualified manufacturers could also exclude from gross income any gain earned on the disposition of assets in its country of origin. This will prevent manufacturers from taking burdensome tax hits when they move to the U.S.
To qualify for these incentives, a manufacturer must maintain at least the same production levels in the U.S. as it did in its country of origin.
Roy’s office noted that in 2018, “China accounted for over 28% of the world’s manufacturing output, while the U.S. accounted for only 16%.” He quoted economist David Goldman, who stated, “At a seasonally adjusted annual rate, the US is buying $635 billion of Chinese goods, equal to a staggering 27% of US manufacturing Gross Domestic Product…That’s the sort of import dependency economists associate with Third World countries dependent on former colonial powers.”
On Tuesday, Florida GOP Governor Ron DeSantis (R-FL) announced that the state had created incentive packages to elicit companies using Florida’s ports to combat the supply chain crisis.
The governor’s office said in a statement:
At the event, JAXPORT announced that they will be offering incentives to any company that chooses to bring its business to the port, freeing up backlogs at other ports while ensuring Americans are able to receive the goods they order faster. Governor DeSantis was able to make the announcement that Florida Seaports are able to meet demand because Florida has continuously invested in its seaports.