Uncertainty Over Tax Hikes Threaten Supply Chain

By July 25, 2012General

This is the third in a week-long series of posts highlighting  manufacturers’ accounts of how they will be impacted by the impending tax increases. The first two posts can be found here and here.

Paulson Manufacturing, a Temecula, California based company that specializes in making protective equipment for police, firemen, and electricians, among many other products, is deeply concerned about the impact that tax hikes will have on both its customers and suppliers. Roy Paulson, the third generation of his family to own and operate the company, said, “I’ve been trying to prepare as best I can, but the uncertainty is the worst part – not knowing if my customers will be able to buy my products or if my suppliers will be able to weather a significantly increased tax burden.”

Massive tax hikes, set to take effect in 2013, are a threat to manufacturers of all sizes. The negative ripple effect that will be felt up and down the supply chain draws closer to reality each day that Washington fails to act in order to protect manufacturers.

Mr. Paulson employs 150 people and has led his company to significant success as a global exporter of his products. He has worked extensively to diversify his product lines and expand his sales operation into new markets to protect against the impact of the fiscal cliff. But as he noted, “When people face higher taxes they spend less, and that’s a huge problem. We need to have a bridge that will provide certainty on the way to badly needed tax reform.”

Coming out of the Great Recession, it’s fair to say that our economic recovery has been modest at best. As Mr. Paulson wisely commented, these tax increases will touch everyone across the nation. It begs the question, with the catastrophic effects of the tax increases so glaringly obvious, how can Washington continue to leave our country’s job creators in limbo?

Leave a Reply