Manufacturers send their thanks to Ways and Means Committee Chairman Dave Camp (R-MI) for holding a hearing yesterday on the Treatment of Closely-Held Businesses in the Context of Tax Reform. As we’ve been saying for years, more than 70% of manufacturers operate as “S” corporations or as other “flow-throughs” and pay income taxes at individual tax rates.
These entities are responsible for nearly 60 percent of total net business income and employ over half of the private sector workforce. In a nutshell: the treatment of S corps and other flow-throughs – and thus individual tax rates –should be a key part of any tax reform discussion.
However, that’s not always the case. As we noted last month, the President’s Framework for Business Tax Reform didn’t address flow-through entities because it didn’t address individual tax rates that apply to flow-throughs. Instead, the President continued to argue that individual tax rates should go back up to their pre-2001 levels for many of the very taxpayers who are business owners. What we need is comprehensive tax reform that includes permanent lower tax rates for the the small businesses that make up a significant part of the American economy and private sector employment.
We also appreciated the testimony of several witnesses who underscored the need for comprehensive tax reform that results in a simplified and streamlined pro-growth tax code to allow business owners to make decisions based not on the tax code but what’s best for their business. The NAM will continue to urge Congress to take action on this national priority.
Carolyn Holmes Lee is senior director of tax policy, National Association of Manufacturers.
In her role, Carolyn leads the Institute’s workforce efforts to close the skills gap and inspire all Americans to enter the U.S. manufacturing workforce, focusing on women, youth, and veterans. Carolyn steers the Institute’s initiatives and programs to educate the public on manufacturing careers, improve the quality of manufacturing education, engage, develop and retain key members of the workforce, and identify and document best practices. In addition, Carolyn drives the agenda for the Center for Manufacturing Research, which partners with leading consulting firms in the country. The Institute studies the critical issues facing manufacturing and then applies that research to develop and identify solutions that are implemented by companies, schools, governments, and organizations across the country.
Prior to joining the Institute, Carolyn was Senior Director of Tax Policy at the NAM beginning in 2011, where she was responsible for key portions of the NAM’s tax portfolio representing the manufacturing community on Capitol Hill and in the business community and working closely with the NAM membership. She served as the Director of Legislative and Government Affairs at the Telecommunications Industry Association, Manager of State and Federal Government Affairs for 3M Company, and in various positions on Capitol Hill including as Legislative Director for former U.S. Senator Olympia Snowe (R-ME), and as a senior legislative staff member for former U.S. Rep. Sue Kelly (R-NY).
Carolyn is a graduate of Gettysburg College in Gettysburg, Pennsylvania graduating with a B.A. in Political Science. She resides in Northern Virginia with her husband and three children.
Latest posts by Carolyn Lee (see all)
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