This morning, we are pleased to exclusively report about the Patriotic Investment Act, a new bill introduced by Senator Marco Rubio (R-FL) and Representative John Moolenaar (R-MI). The bill would change the tax treatment of investment in Chinese companies, taxing them as regular income and not at the preferential capital gains rate.

The legislation provides a six-month grace period for divestment after enactment and offers investors the option to pay the resulting tax liability in three annual instalments. Additionally, the bill would deny foreign tax credits for income related to the disposition of these securities.

From our article:

Of course, much will depend on the next Administration. But what will matter most is the big tax fight that everyone is expecting in 2025, as the TCJA is up for renewal. That's when, given both sides' tax cut promises and the reality of the deficit, everyone will be looking for revenue raisers.

Click through for our full coverage and analysis of the bill.

Policy News You Need To Know

#PermittingReform — Who says policy isn't made in an election year? Permitting reform has been having a banner week. Yesterday the House passed H.R. 6474 which would expedite geothermal exploration. Even more importantly, the Building Chips in America Act passed the House, with support from the Biden Administration. The bill would exempt chip fabs from NEPA regulations, the green red tape (pun sort-of intended) that holds up so many investment projects. Meanwhile, the Harris campaign has put out a statement supporting permitting reform, though color us skeptical since, as we previously reported, her key appointments in this area have been permitting reform skeptics. FAI's Thomas Hochman had the funniest take: "It’s crazy, all the climate people leave DC for NYC climate week and suddenly we pass every single permitting bill."

#AmericanManufacturing — Robert Gates had an op-ed in the Washington Post this week warning about the American defense-industrial base's lack of capacity to meet the challenges of the 21st century. "The defense-industrial base, after decades of neglect, cannot produce major weapons systems in the numbers we need vast quantity of munitions required for a great-power conflict. Despite these realities, it is largely business as usual in Washington. Dramatic change is needed to convert rhetoric into ensuring and sustaining long-term military superiority." All very true. Obvious, even, you might say. But what's important is less the content than who says it, a former Defense Secretary for Presidents Bush and Obama. Rebuilding America's defense-industrial base is one of the goals the establishment and populists share.

#AmericanManufacturing — Speaking of the defense-industrial base and of bipartisanship, USNI News, an arm of the US Naval Institute, has a good article on the Ships for America Act, a bipartisan bill that would restore US shipbuilding capacity. The bill envisages some combination of regulatory reform and tax credits.

#Energy — Speaking of significant op-eds: the great Kevin Roberts of the Heritage Foundation has one in RealClearPolicy attacking the Biden-Harris energy policy. He argues that a "climate change revolution" is being pushed by federal bureaucrats, corporate leaders, and activists, transforming America from the top down. Roberts points out that the American Dream has historically been powered by America being a "fossil-fuel society."

#Process — Kamala Harris has talked about eliminating the filibuster, so R Street has published a timely article on why that's a bad idea.

#Trade — An analysis by the Tax Foundation finds that the tariffs proposed by Donald Trump and JD Vance would "reduce long-run GDP by 0.8%, the capital stock by 0.7%, and eliminate 684,000 jobs, not counting likely foreign retaliation." It should be noted that the Tax Foundation are notorious advocates for free trade, but on this issue it's important to listen to arguments from all sides. Some might even argue that 0.8% of GDP sounds pretty low to rebuild manufacturing capacity and sovereignty.

#K12 — Fascinating. AEI's Rick Hess interviews the leader of a group that tries to teach students "digital literacy." Digital literacy is an important topic. What's more important is not leaving it up to unionized teachers who believe "online misinformation" equates with "anything other than DNC talking points."

#AI #BigTech — No telling if it's true or not, of course, but you may still appreciate this testimony on reddit by a freelance remote worker who's pretty sure his boss is an AI.