Sometimes, the best investments and themes become the best not because of their truly profound nature, but actually because of the tax code and government incentives that have been layered around it. It’s easy to miss this as trends, media, and hype eventually replace it in the news cycle and “tax breaks” for industrial manufacturers isn’t exactly selling clicks or subscriptions in media firms.

The tax code, in one way or another, is the ultimate bull market indicator for a sector. What I mean: if the tax code tips in their favor, everything changes.

Let me give you an example:

– Under recent proposals from Treasury Secretary Scott Bessent, the tax code is being rewritten to aggressively favor domestic production and factory investment.

– 100% Immediate Expensing for Factory Investments Businesses: can fully expense the cost of building or upgrading manufacturing facilities in the year the expense occurs, rather than depreciating it over decades. This significantly improves the economics of capital-heavy projects.

– Suspension of R&D Capitalization: The current rule forcing companies to amortize domestic research and development costs over five years is on pause. Instead, full expensing for R&D returns through 2029.

– Interest Deduction Based on EBITDA: Businesses can deduct more interest by reverting to an EBITDA-based limit, giving manufacturers more breathing room as they finance expansion.

– Corporate Tax Cuts for Manufacturers: A proposed corporate tax rate cut from 21% to 15%, but only for qualified U.S. manufacturers would mark one of the most sector-specific breaks in recent history.

This is incredible news.

This is a game changer.

Manufacturing can scale and grow faster than any industry as they do not get similar benefits.

Trends change slowly, until suddenly, it all happens.