Raising Taxes on Manufacturers Worries Their Employees, Too

By November 24, 2010Taxation

Dyke Messinger is the head of Power Curbers Inc., a manufacturer that makes and sells concrete paving equipment. The family-owned busineess was founded in 1953, grosses $20 million a year, and employs about 130 workers at facilities in Salisbury, N.C., and Cedar Falls, Iowa. A member of the National Association of Manufacturers’ board of directors, Dyke today explains what the pending expiration of the 2001 and 2003 tax rates means to businesses and employees.

From The Washington Times,Tax hikes aimed at the rich hit everybody“:

there is a perception among politicians and pundits that letting the top-tier tax rates expire and revert to the higher, pre-2001 levels will simply increase taxes on the wealthy. That is not true. Seventy-three percent of manufacturers file their business taxes at the individual rate – including Power Curbers Inc. Let there be no doubt, these burdensome tax increases will hit small manufacturers like us, and they will hit hard.

As a result, instead of reinvesting, hiring and expanding, employers are going to make more cuts. This concern is not unique to us but something I hear from other manufacturers as well – forcing difficult choices regarding wages, benefits and other actions that could have negative consequences for employees. As hard as the tax increases will be on employers, they will hurt employees just as much.

My employees understandably are very concerned — not just about the tax increases they may face if Congress fails to act — but about their jobs, especially when they hear news of policies that will burden their employer with more costs. Charles Lamb, a Power Curbers employee and a talented metalworker, shared his thoughts on this issue with me. He and his co-workers are worried about pay-rate freezes, reduced work opportunities, from 36 to 32 hours per week, and rumors of downsizing. They understand that tax increases and policies that add costs hurt businesses and their employees and only contribute to more uncertainty.

The NAM has prepared a ManuFact sheet that lays out the facts and figures about the impact of the looming tax increases on smaller manufacturers.

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