The New York Times reports on manufacturers’ reaction to the tax compromise moved forward by the Senate on Monday. The story is, “Tax Breaks Bring Hope for Hiring“:
To many manufacturing companies, the tax cut proposal now being considered in Washington may be just enough to spur additional spending and hiring.
At Yushin America, a Rhode Island company that makes and maintains robotic manufacturing equipment, executives say that the business tax breaks would allow them to invest in new machinery, new employees and even a new roof.
“It’s a chance for us to put it back in the business and grow,” said Michael Greenhalgh, operations manager of the company in Cranston, which employs 60 people and has annual sales of about $21 million.
The story quotes the NAM’s Monica McGuire and uses Bison Gear and Engineering in Illinois as a case study of how the tax treatment can spur investment.
Because Bison is organized as a subchapter S corporation, and its income is taxed at its owners’ individual rate, it will benefit if Congress extends the tax break for the wealthy. The company, which has $50 million in sales and 225 employees, will also reap tax savings from the changes in depreciation and research policies.
Ron Bullock, company chairman, said three positions in the research and development staff had been vacant for months as he tried to gauge the strength of the economic recovery and the prospects of a double-dip recession. With the tax savings, Mr. Bullock said, he expects to hire as well as replace aging equipment.
“Other businesses will use their tax incentives to order products from us, which will allow us to hire and, hopefully, expand,” he said. “That’s the way you turn an economy around, and allay the fears people have about whether this economy is a good place to invest.”
Ron is an NAM board member.