Us Congress House Bill HB3938

Us Congress 2023-2024 Regular Session

• Introduced: 6/9/23
• Refer: 6/9/23
• Report Pass: 6/13/23

Caption

Build It in America Act

Impact

If enacted, HB 3938 would significantly alter the landscape of federal tax law as it pertains to agricultural land ownership and the taxation of foreign investments. The imposition of a 60% tax on purchases of U.S. agricultural interests by disqualified persons is particularly noteworthy as it serves to deter foreign ownership in critical sectors of the economy. Furthermore, the proposed modifications aim to simplify tax credits for clean energy vehicles while mandating that components be sourced or manufactured within North America, thereby promoting domestic production and addressing supply chain vulnerabilities.

Summary

House Bill 3938, titled the 'Build It in America Act', seeks to amend the Internal Revenue Code to encourage economic growth primarily through modifications to existing tax provisions. The bill includes changes to the treatment of research and experimental expenditures, the extension of certain tax benefits, and the introduction of new taxes on the acquisition of U.S. agricultural interests by disqualified persons. These changes aim to support domestic investment and bolster the growth of the local economy while also enhancing supply chain security and reforming clean energy credits.

Sentiment

The sentiment surrounding HB 3938 appears to be largely favorable among proponents of domestic economic development who view it as a necessary step toward protecting U.S. interests from foreign acquisition and fostering local investment. However, there are concerns from critics regarding the potential implications of increased taxation on agricultural transactions, which may present barriers to entry for foreign investors seeking to operate within the U.S. market. This could lead to broader discussions on balancing investment with national security considerations.

Contention

Notable points of contention within the discussions of HB 3938 include the stringent tax measures proposed against foreign disqualified persons and the potential impacts on agricultural land transactions. Stakeholders worry that such high tax rates could lead to unintended consequences, including reduced foreign direct investment and complications in the agricultural sector. Additionally, the bill's provisions on clean energy credits have sparked debate over their feasibility and the long-term viability of incentivizing local manufacturing amid ongoing global supply chain challenges.