"For every dollar you spend on American workers, suppliers, and factories, the United States will give you up to 6 cents in tax credits."
Summary
The Manufacturing Incentives Now Act creates a new transferable tax credit under IRC Section 38A for domestic manufacturing. The credit rewards companies based on their domestic value-added — the labor, domestic materials, and capital investment that create American jobs and supply chains. Unlike a simple corporate tax rate reduction, MINA delivers benefits proportional to actual domestic value creation, ensuring that manufacturers investing in American capacity, workers, and supply chains receive immediate benefit regardless of current profitability.
How It Works
The credit is a dollar-for-dollar reduction of tax liability — not a deduction from income. A deduction saves $0.21 per dollar deducted at the 21% rate. A credit saves $1.00 per dollar of credit. The credit calculation is: Qualified DVA Costs × DVA Ratio × Leverage Factor × 6%. DVA Costs include domestic labor, domestic materials, and depreciation. The DVA Ratio is DVA Costs divided by Total Product Value. The Leverage Factor reduces the credit for companies with high debt-to-equity ratios, ensuring the credit rewards productive investment rather than financial engineering.
Key Features
- Credit = 6% × DVA Ratio × Leverage Factor × DVA Costs
- DVA Ratio floor of 20% for all manufacturers; cap at 80%
- Credits transferable to qualified buyers (DVA ≥ 40%) or to Treasury at 85% of face value
- Leverage Factor phases down benefit for highly leveraged companies (D/E > 0.11 to 1.5)
- 5-year offshoring recapture provision
- Clear NAICS 31–33 definition prevents gaming
- Allowed in addition to Section 199A, Section 45X, and CHIPS Act incentives
Why It Matters
A 15% tax rate for manufacturing is a great idea but does not work in practice. Reducing the corporate tax rate would reward profit but not support manufacturers investing in capacity expansion, competing against Chinese subsidies, or operating on thin margins. Past manufacturing incentives (Section 199) were vulnerable to overbroad definitions and financial engineering. Pre-profit and scaling manufacturers receive little or no benefit from income-based incentives. MINA solves these problems by tying the benefit directly to domestic value creation.