At the Commerce Committee, Smart Comments on Taxes, Regulations

By March 3, 2011Regulations, Taxation

Chairman Jay Rockefeller (D-WV) presided over a quick but informative committee hearing Wednesday, “The Future of American Manufacturing: Maintaining America’s Competitive Edge.” (We judge an hour to be quick by hearing standards; Senators had to go to the floor to vote on the two-week spending bill.) Sen. Rockefeller’s opening statement is here.

Rep. Steny Hoyer, the House Democratic whip, gave a statement, and Commerce Secretary Locke read a statement and answered questions.

Senators’ comments were on a broad range of questions, and informatively so. Sen. Olympia Snowe (R-ME) pressed Secretary Locke to reconcile the Administration’s ostensible call for more reasonable regulations with the EPA’s new Boiler MACT rule, which will impose heavy costs on her state’s pulp and paper industry. The Secretary explained that the EPA rule on industrial boilers, in response to a court order, had been scaled back after public comment. In other words, “Could have been worse!”

Sen. Maria Cantwell (D-WA) discussed the importance of “lean” manufacturing as a key to global competitiveness. (The context was Boeing’s recent winning of the Air Force contract to build refueling tankers.) It’s not often we hear an elected official speak on “lean,” but it’s definitely an important advance for many U.S. manufacturers.

Sen. John Boozman (R-AR) hit the mark with his comments on overregulation and global tax competitiveness. He started by observing: “In Arkansas, the name of the game right now, and really throughout the country, is jobs, jobs, jobs.”

My manufacturers feel like they’re getting killed with regulation, whether it’s Boiler MACT or this or that, just numerous things coming down that are creating so much uncertainty, that the last thing in the world they’re doing is thinking about hiring people. So we have to have some certainty…

Other things like: Lots of manufacturers that are very successful with what they produce, and they’re building manufacturing facilities overseas to service the area there, to keep the transportation costs [down] and then again, having the inability to bring those profits home. And so, in not bringing them home, pretty soon they say, well, we need to spend that money and they start expanding those plants, and before you know it, the decision’s made to actually move over there.

A video clip of the Senator’s comments is on his Facebook page.

We really appreciate a Senator who understands and explains the practical consequences of the U.S. system of global taxation, which discourages repatriation of overseas earnings.

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