S.1642 - Strengthening Essential Manufacturing and Industrial Investment Act; SEMI Investment Act (119th Congress)
Summary
S.1642, the Strengthening Essential Manufacturing and Industrial Investment Act or SEMI Investment Act, proposes an amendment to the Internal Revenue Code of 1986. The amendment aims to expand the advanced manufacturing investment credit to include materials integral to semiconductor manufacturing. This expansion seeks to incentivize domestic production of semiconductors and related materials.
Expected Effects
The bill's passage would broaden the scope of the advanced manufacturing investment credit, potentially leading to increased investment in semiconductor manufacturing within the United States. This could stimulate the domestic supply chain for semiconductors. It also directs the Secretary, in consultation with the Secretary of Commerce, to define and regularly update the list of qualifying materials.
Potential Benefits
- Increased domestic semiconductor production, reducing reliance on foreign suppliers.
- Potential for new jobs in the manufacturing and related sectors.
- Encourages innovation and technological advancement in semiconductor manufacturing.
- Strengthens the US supply chain for critical technologies.
- Provides clarity and guidance through the Secretary's list of qualifying materials.
Potential Disadvantages
- Potential for increased government spending through tax credits.
- Risk of inefficient allocation of resources if the credit is not targeted effectively.
- Complexity in defining and identifying qualifying materials, leading to potential disputes.
- Possible unintended consequences or loopholes that could be exploited.
- May not address all the challenges facing the semiconductor industry, such as workforce development and infrastructure.
Constitutional Alignment
The bill aligns with the Constitution's broad mandate to "promote the general Welfare" (Preamble). Congress has the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8). The bill uses tax policy to incentivize manufacturing, which falls under this power. However, the specific details of implementation and the potential for unequal application could raise concerns about equal protection under the law.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).