We’ve already said it but it bears repeating, the NAM appreciates the Senate’s advancing a budget plan for fiscal year 2014 (S.Con.Res.8). Manufacturers are concerned about the historically-high levels of the federal deficit and its impact on the national debt on manufacturing and the overall U.S. economy. We need a budget that marks a path to reduce the federal debt and deficits, focusing both on real and immediate spending cuts and longer term structural changes to our nation’s entitlement programs. We support comprehensive tax reform to promote economic growth and U.S. competitiveness. Unfortunately, the S.Con.Res 8 doesn’t accomplish these goals. However, the vote-a-rama that’s going on now, gives Senators a chance to support amendments that would improve the Senate budget and reject those amendments that would make the plan even more anti-growth and anti-manufacturing.
It’s no secret: our current tax system is broken and discourages economic growth and U.S. competitiveness. That’s why comprehensive, revenue neutral tax reform is critical to our nation’s economic future. But, the S.Con.Res8 doesn’t include tax reform. Instead it proposes a $1 trillion tax increase. That’s why we support amendments to eliminate this jaw-dropping tax increase and support allowing Congress to advance pro-growth, revenue-neutral tax reform that would spur job creation and investment. Last night we informed the Senate that votes on an amendment by Sens. Grassley and McConnell seeking to strike the $1 trillion tax increase and replace it with a deficit neutral reserve fund for revenue neutral tax reform might be considered as “NAM Key Vote” for 2013. While the amendment failed, the fight is not over. We support Sen. Cornyn’s amendment requiring a supermajority of the Senate to increase tax rates on businesses and individuals.
Manufacturers lead in a lot of areas including in providing quality retirement benefits to their employees. We support amendments Sen. Burr’s amendments to protect these benefits from being a source of revenue for additional government spending. As the world’s leading innovators we strongly support Sen. Hatch’s amendment to preserve and make permanent the R&D tax credit—long been a priority for the NAM.
Many small and medium size manufacturers (SMMs) are family-owned businesses and that’s why we support Sen. Thune’s amendment that will allow for the full and permanent repeal of the estate tax.
We also oppose amendments that will make us even less competitive – amendments that seek tax increases on U.S. global companies. 95% of the world’s consumers live outside of the U.S. and yet U.S. tax laws make it difficult for U.S. companies with worldwide operations to thrive and compete in the global marketplace. To make U.S. multinationals more competitive, the NAM supports the adoption of a competitive territorial tax system as part of a comprehensive tax reform that also lowers the corporate tax rate and reduces rates for the SMMs that pay taxes through the individual tax code.
Speaking of increasing taxes, we support an amendment to repeal the Health Insurance Tax (HIT) included in ACA filed by Sen. Barrasso. This new tax—to be levied on health insurance companies beginning in 2014—will have the unintended result of increasing costs for many SMMs that provide health care benefits for their employees.
Finally, we support Sen. Coats’ amendment that would repeal the 3.8 percent investment income surtax also included in ACA and now in effect. When added to tax increases in the fiscal cliff deal, some taxpayers now pay nearly 50 percent more in taxes on these investments than they did last year. Increasing the tax on savings and investment reduces the amount of capital business owners have available to invest in their companies and we fear that this tax will ultimately result in the loss of vital funds needed for business operations and job creation and for that reason we support the amendment.