1. United States
2. Texas
3. Letter

The tax code change to Section 174 implemented in 2022 has severely undermined America's competitive advantage in technology and innovation. By eliminating the ability for companies to fully deduct research and development expenses in the same year, the new rules have made investing in domestic R&D efforts far less financially viable. This ill-advised policy shift is causing widespread layoffs in the tech sector as firms are forced to cut costs related to product development, engineering, and technical talent here in the United States. If left unaddressed, the Section 174 amendment will accelerate the offshoring of innovation to countries with more favorable tax treatment for R&D investments. Ultimately, this will weaken America's global leadership in cutting-edge fields like artificial intelligence, cloud computing, and digital services. Reversing this misguided change is crucial to keeping the United States at the forefront of technological progress and preventing further hemorrhaging of high-skilled jobs. To safeguard our nation's economic competitiveness and protect American workers, urgent legislative action must be taken to repeal the Section 174 modification from the 2017 tax law. Reinstating immediate expensing for qualified research expenditures will re-establish powerful incentives for companies to double down on innovation within our borders. This tax policy pivot is essential for preserving America's long-term economic dynamism in an increasingly technology-driven global marketplace. The future prosperity of our communities hinges on proactive measures to foster an ecosystem conducive to domestic investment, talent retention, and cutting-edge breakthroughs.