ICYMI: CfG President McIntosh Joins The Tony Kinnett Cast

Washington, D.C. – In case you missed it, Club for Growth President David McIntosh joined the Daily Signal’s Tony Kinnett on The Tony Kinnett Cast to discuss a recent Wall Street Journal piece calling for Congressional Republicans to expand provisions in President Trump’s Tax Cuts and Jobs Act to allow full and permanent expensing of capital assets, including machinery, equipment, and buildings. On the episode, McIntosh outlines that policy would encourage larger businesses to move manufacturing back to the United States, boosting GDP and accelerating domestic job creation.

Click here to watch the full interview on YouTube.

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Click here to listen to the full episode on Apple Podcasts.

TRANSCRIPT:

Tony Kinnett: “You’ve heard about the big beautiful bill. You’ve heard about all other kinds of political nonsense front and center. So when an individual produces a decent idea, an actual functional thing that can be a benefit on the ground to Americans, you don’t expect to see it in the Wall Street Journal.  And yet here it is from David McIntosh. He was a Reagan staffer turned conservative rabble rouser. He is, of course, a co-founder of the Federalist Society. The man is, in fact, a powerhouse when it comes to decent economic ideas. We’re going to talk about a few of them. David, thanks for joining us.

David McIntosh: Great to be with you, Tony. Thank you.

TK: So again, I’m used to opening up a Wall Street Journal opinion page and seeing a couple of good articles here and there. But when people start bringing line-item details that I can understand, I’m not some major business owner, all right? I’m a broadcaster out of Indiana. But when I see good proposals that provide on the ground stuff here again, like specific line items that perhaps the 2017 Tax Cuts and Jobs Act almost achieved, I’m looking at,”  Hope in something Congress could write for the first time. Break this down for us. 

DM: Yeah. So we were looking at the problem, how do we bring back factories and jobs to America? President Trump’s made that front and center one of his priorities. There’s a provision in the big, beautiful bill that says, if a company builds a new factory, buys a new machine, we’re going to allow you to immediately deduct all of that cost from your taxes. Immediate expensing is what they call it. The House put that bill in provision in the big, beautiful bill, but they phased it out after three or four years. And President Trump wants it in there. Secretary Besant and Treasury wants it in there because they know this will grow the economy. The Tax Foundation says it’s about 1% bigger economy when we do this. Just this one provision.

TK: I am so tired of the quibbling and the squabbling over this conversation over how are we going to lure businesses back over here? You know, what about all of these top down approaches? The common consensus among the right from your average economists all the way to your small factory operators, from your pundit class to your practical class, the blue collar and the white collar on the right. They understand deregulation and lowering taxes creates an incentive. If you’re going to move GM back into the United States from Mexico, you’ve got to let them build the factory. You have to make it worth the while. How is this not already, I mean, a four year phase out is one thing. How is this not front and center in the bill? Really?

DM: No, exactly. And so what we’re working on now is getting the Senate to do the right thing and make it permanent. Because that’s when the tax foundation says these factories will come back, we’ll have the jobs, the economy will grow by 1% just in that one provision. Club for Growth’s foundation has been studying this for over a year. We got the economists to come in. We’ve been working with the tax writers up on the hill. And we’re saying, yes, big, beautiful bill. We need it. We need to make sure we extend the Trump tax cuts. But the one thing you can do, the one thing you can do that will really supercharge this for bringing factories back here is this immediate expensing for buildings, for capital investments like a machine that the workers use to build the products. Let them take 100% expensing on that, tax deduction on that. And you’re right, you couple that with deregulation. What Lee Zeldin is doing at EPA, speeding up the permitting process, that will supercharge it and let us have the president’s vision of building back an industrial base here in America.

TK: And this is one of the key things that I think appeals to a lot of people from the Midwest. And again, you know this, you served as a representative from the second Indiana district. Is that right, the second?”

DM:  That’s right.

TK: You’re in my-

DM: It got re-numbered to the sixth, but it’s all Richmond, Anderson, Muncie.

TK: Well, you know I’m doing the show out of Greenfield. I don’t know if you knew that.

DM: Yes, I did know that, but that’s awesome. Say hi to my Hoosier buddies.

TK: Yeah, absolutely. So though the show is national and though The Daily Signal is all over the country, I have a lot of passion towards Anderson and towards Muncie and Newcastle who lost Chrysler, Anderson who lost Dilko Remy, Muncie who lost the bevy of businesses and manufacturing that it has. Eastern Central Indiana, for the rest of our listeners, like a lot of Rust Belt states, had a lot of businesses that left because prices got more expensive. They saw a plan to exploit cheap labor in other countries. Now we want to bring that manufacturing home. The problem is that it’s really, really, really expensive to do so, not just on the paying your labor side, but if you guys seen the OSHA requirements, you got to build factories that meet all of these requirements, some good, some bad, but that’s expensive. And so if you don’t provide tax incentives for businesses to build their buildings in the Midwest, here in Indiana, Michigan, in Ohio, Wisconsin, et cetera, then you’re not going to see that kind of a market return. Again, that’s why I’m telling you guys about this Wall Street Journal article of all things, because unless we actually get behind line-item details that not just should be in the bill are essential, crucial to the bill, we’re not going to bring the businesses back.

DM: You’re absolutely right, Tony. And the Senate has an opportunity to do that. I saw Senator Daines organized a letter with Republicans saying, we want permanency. No more of this. We’ll put it on for three years and then take it off, make you hire lobbyists to get it it back on. He’s spot on. Senator Daines is really great because he comes out of the business community before he was in politics. He knows how to incentivize these corporate guys to bring the work, do the manufacturing here in the United States.

TK: And this is, again, a common sense kind of a policy that doesn’t have to be a kind of of, you know, that there’s a bit of a disdain for the kind of lobbying and one-off breaks that are very ethereal to the American people, but writing off purchases for factories built in the United States isn’t one of them, right? I’m not going to look at a local business or a local factory that’s employing people and saying, you are putting this machine here that is a good quality machine, you are not cutting corners, you are not going to have to pay a huge tax on it, so you have to maybe put one in that is less safe for the workers, it’s easier to use, it’s got a lot better longevity. That makes sense. Again, it’s not just benefiting some ethereal big corporate interest, it’s directly benefiting those in the Midwest who who are doing the work, who are going to benefit from the economic growth, and again, the taxes will eventually be paid back into the system by the factories operating here. Then to take Club for Growth and say, not good enough, we’re gonna run it through the mill for a year. We’re gonna look at every angle of this, we’re gonna show the expected growth, we’re gonna show the expected risks, as though tax cuts are a risk. But we’re gonna run through this so you actually have data to bring forward. I’m a former science teacher. I can say that I taught at Knightstown a couple of years and you know would know.”

DM: Perfect, I do, that’s great.

TK: You would know where that is. I like to have my sources in place. So, when you actually do the time to run what you’re putting on the table through the ringer, I don’t have as many questions as an interviewer here to ask you about it because when you do your homework, there are fewer questions at the end.

DM: Yeah, no, that’s right and we’ve done the work, we’ve presented it to the committees, the members of Congress, the senators, working with the Treasury Department, Secretary Bessent.

TK: Yeah, dude, Bessent never sleeps.

DM: Yeah, and everybody agrees. Yes, this is good, we should do it. Now we just have to make it permanent so that everybody, the businesses that rely on it, the workers that need this to have their jobs back, they can count on it. It’s 100% there. It’s going to last. It’s permanent. It’s part of the tax code that will grow our economy.

TK: I think so. There are a lot of common-sense approaches that you can really float by blue collar, white collar Americans that they can agree on. But there’s one particular measure that I do want to ask. And this is kind of the flip side here. All right. So you point out, quote, it’s vital to consider the opportunity cost of not making full expensing permanent. We can talk about this would be a really good policy to bring in, but it doesn’t really change things if it’s not implemented. This is not one of those cases. Tell us more.

DM:  No, that’s right. If we don’t do this, that means it’s going to take us many more years to achieve President Trump’s dream of bringing back the factories here because the businesses are going to think, oh, I have to spread this cost over 30 years to build a building, over 12 years to bring a new machine in, and they’re going to schedule it for somewhere down the line. Yeah, that’s a good idea, but not right now. If we do this now, 100% tax deduction for building a new factory, hiring new people, they’re going to say, I want that and I want to do it tomorrow, guys. How fast can we get it done? And that’s the difference. That’s the opportunity cost. Tony, I just got word that Secretary Burgum is calling for me. I know we were going to do 15 minutes.

TK: No, no, that’s fine. That’s actually a great place to go. So thanks very much for your time. Tell the Secretary of the Interior we appreciate all that he’s doing. Take care, sir.

DM: Awesome. We’ll be back with you soon.