The NAM commends the House Small Business Committee for its hearing tomorrow on the impact on small businesses of the tax cliff at the end of 2012 – manufacturers believe it’s critical to extend the current tax code to allow time to get to the what should be the main event: tax reform with the result of a tax code that is simpler, fairer and more competitive.
This hearing should highlight the fact that the lower rates enacted in 2001 and 2003 have played a key role in helping the nearly two-thirds of manufacturers operating as S-corporations or other pass through entities–most of which are small and medium-sized manufacturers (SMMs)–retain and create high-paying manufacturing jobs. As we’ve said time and again, raising taxes on these SMMs would be counterproductive, particularly as we face persistently high unemployment rates and stagnant economic growth.
Unfortunately, the debate about extending the 2001-2003 tax relief during the past year too often overlooks the potential impact on SMMs of not extending all the tax relief. According to 2008 IRS data, the average net taxable income for SMMs is $384,000 –extending some but not all of the current individual income tax rates will have a direct and negative impact on many manufacturers. Manufacturing is a capital intensive industry and the capital that is needed to grow and expand operations, increase product lines, hire additional workers most often comes directly from the owners.
Manufacturers are concerned about the fiscal cliff and are paying attention to the debate in Washington. A March NAM/Industry Week Survey of Manufacturers found that 56 percent of respondents believed that the tax increases slated to go into effect in January 2013 would negatively impact business investment and job retention/creation. Even more alarming in the most recent survey (released today!) more than 78 percent of respondents cited uncertainty regarding the fiscal abyss as their chief concern. In addition, the number of manufacturers with a negative outlook on the future of their business has doubled in the past three months. As we’ve said all year, Congress must act to extend the 2001 and 2003 tax rates and prevent tax hikes on smaller 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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