This week, the NAM joined a number of other business associations representing a wide swath of the economy in a letter calling on the IRS to reconsider regulations under Section 7602 of the IRC code that allows the IRS to hire outside attorneys to carry out taxpayer examinations, including taking testimony and reviewing books, papers and testimony produced in compliance with subpoenas. In sum, these associations are urging the IRS to stop allowing outside firms to carry out the governmental functions that should properly … all of which are functions that are inherently governmental. (continue reading…)
Owens-Illinois (O-I) is an iconic American manufacturer. Founded in 1903 by Michael Owens who invented the automatic bottle-making machine, O-I has been churning out glass bottles for more than 100 years. This company with over 21,000 employees worldwide make the bottles used by thousands of manufacturers and millions of consumers each year. However, even after all of these years, O-I needs to continually innovate in order to grow. (continue reading…)
To invest or not to invest, that’s the question on the mind of businesses large and small all across the country. What’s holding them back? Well there are lots of reasons, the economy, the season, their future growth expectations and tax policy to name a few. Most of these reasons make sense. A business owner must think about the investment and decide if it’s an expenditure worth making, a risk worth taking. What’s not reasonable though is that tax policy is one of these questions. (continue reading…)
All week we’ve been telling the story of how the expiration of critical pro-investment tax policies — including enhanced Sec. 179 expensing, 50 percent first year expensing (aka bonus depreciation) and the comparable provision allowing the accelerated use of AMT credits in lieu of bonus depreciation – effects manufacturers large and small. (continue reading…)
A letter on the website for Cleveland’s Tendon Manufacturing Inc., from owner Mike Gordon states what Tendon’s customers have long known, “some things never change; our focus continues to be, to provide excellent service, competitive pricing and quality products to our customers.” Another thing that doesn’t change is Gordon’s strong support for an extension of enhanced Section 179 expensing that would allow him to up his investment in his company. (continue reading…)
Let’s face it: our economy is not where it needs to be, and uncertainty is holding back greater investment in the economy. Increased investment by the manufacturing sector will make a difference. Investment incentives that allow companies to immediately write off at least 50 percent (or 100 percent for small businesses) of the cost of capital equipment and provide relief for businesses that continue to struggle have made a difference in recent years. These incentives expired at the end of 2014. Reviving and extending these important provisions will promote the investment needed to push our economy into high gear. (continue reading…)
The House Ways and Means Committee is scheduled to consider a bill authored by Rep. Pat Tiberi (R-OH) to make 50 percent first year expensing (aka bonus depreciation) permanent. The bill would also make a critical policy change that would allow companies with stored corporate Alternative Minimum Tax Credits (AMT) to be used more quickly in lieu of bonus depreciation.
The underlying policy has long had bipartisan support – which makes sense because economists of all stripes confirm that reducing the tax cost of capital investment is a positive for jobs and economic growth. A basic premise of economic theory is that investment is a positive function of an increase in demand and a negative function of cost. The cost of capital to a firm includes three components: the price of capital equipment, the cost of financing the equipment and the tax treatment of investment. 50 percent expensing lowers the after-tax cost of capital and increases the number of profitable projects a firm can undertake, helping spur the growth in business investment.
The NAM has long supported the continuance of this on-again, off-again, tax provision which has been included in the tax extenders package while also supporting making this provision permanent as would happen in Rep. Tiberi’s bill. In fact, earlier this year the NAM released a study on the impact the enactment of a pro-growth, pro-manufacturing tax reform plan would have on our economy. The study, A Missed Opportunity: the Economic Cost of Delaying Pro-Business Tax Reform takes a close look at the economic impact of enacting a five-prong pro-business tax package similar to NAM’s priorities and concludes that lack of action on pro-business tax reform is costing the U.S. economy in terms of slower growth in Gross Domestic Product (GDP), investment and employment. One of the policies that was studied was the impact of full expensing in addition to a lower corporate tax rate, lower rates for pass through businesses, a permanent R&D incentive and a shift to a competitive international tax system. The report finds that over a ten-year period, a pro-business tax plan would increase GDP over $12 trillion relative to CBO projections – and over 58 percent of the impact is attributable to the expensing and R&D provisions. The study also found that enactment of these policies would increase investment by over $3.3 trillion – with over four-fifths attributable to full expensing and the reduced corporate and individual tax rates.
Also, just today, the non-partisan tax research group, the Tax Foundation, released a paper updating the impact of permanent 50 percent first year expensing. Their paper, like our study, confirms that making this policy permanent creates job, adds to the capital stock and increases investment.
While the policy has enjoyed bipartisan support for many years now, there continues to be a difference of opinion regarding how long the policy should be enacted for. For manufacturers, it’s simple. Capital investment often requires several years of planning and in an already uncertain world with challenges confronting businesses every day, uncertainty regarding taxes is not something any company should have to continually be confronted with. That’s why the NAM urges members of the Ways and Means Committee to support Rep. Tiberi’s bill tomorrow and put an end to this tax uncertainty and allow manufacturers to lead the economic resurgence we all agree is needed.
Manufacturers in the United States are the most productive in the world, far surpassing the worker productivity of any other major manufacturing economy, leading to higher wages and living standards. Unfortunately, one of the largest hurdles facing manufacturers is our own federal government. If it would put the right policies in place, our manufacturing engine would be even stronger, which is why the NAM submitted comments late yesterday afternoon, to the Securities Exchange Commission (SEC) articulating its concerns about two potentially burdensome and costly proposed rules. Both proposed rules are reporting requirements that come courtesy of the regulatory burdens created by the Dodd-Frank Wall Street Reform and Consumer Protection (Dodd-Frank) Act. (continue reading…)
The NAM this week lead the business community in sending a letter to the House Ways and Means Committee urging support for and swift action on Rep. Tiberi’s (R-OH) bill to make bonus depreciation and the comparable accelerated use of AMT credits in lieu of bonus depreciation permanent. This bipartisan legislation, HR 2510, was introduced in May with a list of cosponsors that includes almost all of the Republican side of the Ways and Means dais. This is the second go-around on this bill for Rep. Tiberi, who authored a very similar bill last year which passed the House with significant bipartisan support last summer. (continue reading…)
Every sports fan begins their team’s season thinking, “this could be the year” and hopes for the stars to align so that they can watch their favorite team in the title game.
In the tax policy world, we continue to hope that this is the year where Congress will pass, and the Administration will sign into law, comprehensive tax reform. However, just as athletes know you cannot forget about the fundamentals, as Congress continues to work towards comprehensive tax reform, they need to also ensure that the basics of sound tax policy are in place for our economy to grow. To that end, manufacturers across the country applaud the introduction today of H.R. 2510 by Rep. Pat Tiberi (R-OH) that would make permanent 50% first year expensing, aka “bonus depreciation” along with a complimentary provision which allows companies with AMT credits to accelerate the use of these credits in lieu of bonus depreciation. (continue reading…)