Manufacturers promised that tax reform would spark growth in manufacturing jobs, wages and investments. And, seemingly every day, we’re seeing more and more examples of how manufacturers are keeping that promise with companies like Miles Fiberglass in Oregon, AZZ Inc. in Texas and RGF Environmental Group in Florida taking advantage of the new tax code to invest back into their companies and workforce.
These types of stories are happening all across the country. A new report from the Los Angeles Times highlights the fact that capital investments jumped 9.2 percent in the first quarter of 2018:
Five months after the tax law went into effect—highlighted by a slash in the corporate rate to 21% from 35%—U.S. companies have ramped up their domestic spending.
A closely watched measure of business capital investment growth in the U.S. jumped to a 9.2% annual rate in the first quarter of the year, the best since 2014, according to the Commerce Department. Kevin Hassett, a top economic advisor to President Trump, boasted this week that “you can see capital spending skyrocketing just as we said it would.”
The article also shares the tax reform success story of Amgen, which the National Association of Manufacturers (NAM) highlighted earlier this year. Amgen, a pharmaceutical manufacturer, announced plans to build a new manufacturing facility in the United States after the passage of tax reform, citing the lower costs under the new tax code:
Going forward, Amgen’s Meline estimated the Thousand Oaks company would make 75% of its capital expenditures in the U.S., up from 50% before the tax changes.
“We can see a material rebalance of our investment activities in favor of the U.S. as a direct consequence of the improved competitiveness of tax reform,” he said.
The article cited the NAM’s recent tax reform survey, which found that manufacturers are planning to increase investments (86 percent), hiring (77 percent) and wages (72 percent) in the wake of tax reform:
“You’ll see that play out over the next several years,” said Christopher Netram, the trade group’s vice president of tax and domestic economic policy. “It’s starting now, but capital investment is a process for companies small and large.”
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