This week Shopfloor will be running a series of posts putting a face to the negative realities of the impending fiscal cliff and what manufacturers across the country are facing.
Founded in 1953 by his grandfather, as president and CEO, Dyke Messinger has guided his family owned company, Power Curbers, Inc., through good times and bad for 35 years. Based in Salisbury, North Carolina, this 59 year old company employs 105 people that manufacture machinery critical to infrastructure projects. Click here to view a photo essay of Power Curbers, Inc. Under Dyke’s leadership, they have been industry leaders, innovators, and a model for successful American manufacturing.
During the recession, like many small businesses, Power Curbers struggled as their business opportunities declined due to the economic stagnation. Through careful planning and some tough decisions, after a few years of struggling to keep their head above water, Power Curbers has begun to show modest profits again. Yet their limited gains are at risk thanks to looming tax increases that undermines their fiscal security.
If Congress and the Administration can’t come to an agreement to extend today’s tax rates, Mr. Messinger and his family business are looking at a 32% increase in the amount of taxes they will pay the federal government in 2013 – and this doesn’t begin to take into account other small business tax changes set to take effect. Several expensing provisions that allow Power Curbers to put more money into the business and invest in machinery and workforce development will expire at the end of this year.
In order to be in business for the next 59 years, Power Curbers needs to be able to buy more machines and expand to new markets – but by increasing the amount of money that Mr. Messinger sends to Washington it will take dollars away from what he can use to invest in his family business. Over the last few years he indicated that his company has been able to hold steady, but these looming tax hikes “have everyone stuck in neutral… what Washington needs to understand is that the tax increases will force me to stall any potential growth and cut back on our search for new markets for their products. We’ll be forced to reevaluate everything, from capital purchases, operating expenses, and perhaps even our workforce.”
Manufacturers like Power Curbers have to ability to drive our economic recovery through expansion and job creation, but with Washington adding a massive new cost to doing business, it’s only going to get more difficult for Mr. Messinger and small businesses across the nation.