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Manufacturers Win Several Website Design Awards

The NAM is proud to announce that it has been honored with several awards for its redesign of www.nam.org. Launched in 2010, the website reflects modern manufacturing in America and highlights this critical theme: manufacturing’s vital leadership in innovation, job opportunity, technological progress and economic security. The website is a source of information about policy issues and breaking news affecting all manufacturers in the United States.  The user-friendly site features policy issues, information on how to take action and quick facts on manufacturing in America.

Design & Build Team

Christian Moritz – Vice President, Communications

Jeff Colburn – Vice President, Information Technology

James Skelly – Senior Director, Multimedia

Brian Machi – Senior Director, Information Technology

Ronni Hutchason – Manager, Multimedia

Matthew Preiss – Specialist, Multimedia

Hannah Cheadle – Digital Producer (Digitaria)

 

GD USA Interactive Media Awards Emerging Media Award WebAward The Webby Awards
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China Makes Commitments on Trade, Intellectual Property

The announcement at the completion of the 21st annual meeting of the U.S.-China Joint Commission on Commerce and Trade (JCCT) on Wednesday highlighted progress on a number of major priorities for manufacturers. (U.S. Trade Representative news release, fact sheet)

A new system of ongoing working group engagement appears to have paid off in commitments on the part of China in areas that the National Association of Manufacturers has long emphasized. In one of the most important issues for U.S. companies, intellectual property (IP) protection, there is potentially significant progress for producers in the wind turbine, pharmaceutical, and software industries. China’s commitment not to discriminate against American IP in deciding what products or companies get preferences for government contracts could have significant impact for NAM members selling in the Chinese market.

In addition, the agreement to revise the major equipment catalogue (which governs what products qualify for special treatment in government purchases) and not to use it to discriminate against imports or provide export subsidies, is similarly a positive signal that China will play by the rules of the international trading system that has benefitted it so significantly.

China also made commitments that could further open their markets to U.S. industrial and telecommunications equipment, and agreed to accelerate the process of joining the WTO Government Procurement Agreement. This agreement has been a priority for the NAM as a way to open the door to billions of dollars in purchases by Chinese government entities.

All of this is good news. But long term, it all hinges on China’s implementation of these commitments.

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ITC Details Widespread Theft of Intellectual Property in China

Just in time for the opening of the annual U.S.-China Joint Commission on Commerce and Trade (JCCT) today in Washington, the U.S. International Trade Commission (USITC), an independent U.S. government agency, has released an important study on the theft of U.S. intellectual property in China, “China: Intellectual Property Infringement, Indigenous Innovation Policies.” (News release.)

To no one’s surprise, the Commission found that massive Intellectual Property Rights (IPR) infringement harms market opportunities in China and significantly diminishes the income for U.S. companies whose products are counterfeited and pirated in China (as well as other markets, including the United States).

Further, China is engaged in a concerted effort to promote so-called “indigenous innovation” policies designed with the sole intent of keeping U.S. and other foreign firms out of the huge Chinese government procurement market by requiring the development and purchase of Chinese products and technologies, sometimes through the forced transfer of technology as a prerequisite for foreign participation.

The National Association of Manufacturers expects that the U.S. government will use this study when U.S. trade negotiators meet with their Chinese government counterparts. This threat to American innovation must stop.
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This Gift-Wrapped Tax Increases Comes With an Extra Bracket

Here’s a strange and likely little noticed provision included in H.R. 4853, The Middle Class Tax Relief Act of 2010. The bill, sponsored by House Ways and Means Chairman Sander Levin (D-MI), permanently extends tax rates for those making under $250,000 – de facto raising taxes on those making over $250,000. But, it also goes one step further and creates a whole new tax bracket of 36 percent – increasing the number of brackets from six to seven. Why you ask?

Democrats have promised not to raise taxes on those making under $250,000, but the current bracket of 33 percent kicks in at $209,000. Yikes! What’s a politician to do? President Obama proposed a simple expansion of the 28 percent bracket, giving a tiny break to those who fell into the crack. But that was just a bit too generous for Chairman Levin. So, he created an entirely new 36 percent tax bracket for that narrow window of income.

So much for the Christmas spirit, eh?

The National Association of Manufacturers this morning sent a “Key Vote” letter to the House opposing the bill. That letter is here, and the NAM’s statement is here.

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Overcooked Duck?

If you’re a tax lobbyist, virtually every phone call and meeting these days is centered around predicting the outcome of the lame duck session.  Will Congress finally take responsibility and fix the tax mess?  What’s so remarkable about this situation is that we’ve gotten to this point in the first place, after all, Congress has known about this expiration date for a decade.

Congressman Dave Camp, who will likely be the next Chairman of the Ways and Means Committee, said it perfectly today, “Frankly, it is ridiculous and irresponsible for this problem to have lingered this long.  The continued practice of dealing with expired and expiring tax policies after the leaves have begun to fall isn’t fair to taxpayers and doesn’t inspire much confidence in Washington.”

Proposals from the Administration that would treat some tax rates more favorably than others – the so-called “decoupling” compromise also don’t inspire confidence.  It’s too late in the game to be playing politics.  We’re down to the wire now and that means Congress needs to take care of this in the simplest manner possible – extend current tax rates for as long as possible.

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Administration Continues the Progress on Export Controls

President Obama took steps forward this weekend to promote both U.S. trade and national security by announcing significant  export control reforms with India.  According to a Whitehouse Fact Sheet, “Indian Prime Minister Singh and President Obama committed to work together to strengthen the global non-proliferation and export control framework and further transform our bilateral export control cooperation to realize the full potential of the strategic partnership between the two countries.”

So what does this really mean?  For one, the United States is going to actively work with India to help the country gain membership in the four multilateral export control regimes.  This is significant not only because the National Association of Manufacturers specifically called for improved multilateral engagement in our Manufacturing Blueprint for a 21st Century Export Control Regime, but also because effective proliferation controls depend upon strong multilateral controls. India’s membership will promote greater harmonization of export control systems and help drive consistent implementation of standards across member countries. Given India’s ever increasing and growing role in global security and economic matters, this integration is important for U.S. national security and the manufacturing sector.

Second, the United States will “realign” India in its dual-use export control regulations to reflect India’s status as a strategic partner, effectively treating India similarly to other close allies and partners. India will no longer be listed as a “country of concern” and will establish re-export controls to prevent bad actors from trying to export U.S. technology in India to proscribed third countries. This realignment is significant given the President’s previously announced reforms.  Under the Administration’s proposed three-tiered control list, allies and partners will receive considerably more favorable treatment and exports to those countries will be subject to fewer restrictions.
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Congress’ Inaction on Taxes Will Be Quickly Felt in Withholding Rates

Most of the conversation around the expiration of the 2001 and 2003 tax cuts has circled around how it would affect the top brackets, since the President’s budget calls for extending the tax rates for the bottom brackets. 

We’re glad that discussion is taking place.  But, considering that it’s almost November and Congress still hasn’t passed ANYTHING, it’s probably important to talk about what will happen if all of the taxes go up.  Most people will operate under the assumption that it won’t affect them right away, but they’re in for some serious sticker shock come January due to changes in withholding rates.

Bloomberg has a great story discussing the repercussions, “Employers in U.S. Start Bracing for Higher Tax Withholding“:

If Congress fails to act, income tax rates will revert to higher levels dating from June 2001.

For a married couple with an income of $80,000, that would drain an extra $221.48 in withholding from a semi-monthly paycheck, according to calculations by the Tax Institute at H&R Block. Married individuals earning $240,000 a year would lose an additional $557.78 to withholding in a single semi-monthly paycheck.

That $200 per paycheck is real money. Let’s hope that Congress has the foresight to recognize the impact.

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G20 Ministers’ Agreement: No Magic Wand on Currency

The Group of 20 (G20) finance ministers’ agreement over the weekend is an important step forward on currency relationships and global rebalancing –- establishing a framework that is necessary to move forward in a constructive and cooperative way to resolve significant imbalances among major global economies, but it is not a magic wand resolving the underlying problems.

The communiqué recognizes that trade imbalances must be dealt with and that multilateral agreement is preferable to unilateral action. The communiqué contains a commitment for countries to move toward market determined exchange rates that reflect underlying economic fundamentals and refrain from competitive devaluation of currencies. (News coverage.) All that is to the good, and reflects hard work on the part of the U.S. Treasury.

The key, of course, is implementation of these principles and continued coordination, as large surplus countries like China and Germany need to increase domestic demand and move away from an economic model dependent on exports for growth, and large deficit economies like the United States and some European countries take steps to save and export more. This is not easy, as there are conflicting priorities within countries. (continue reading…)

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Faulty Rationale

Presidential Advisor David Axelrod was making the rounds on the Sunday morning talk shows yesterday — touting the Administration’s plan on taxes.  “We want a tax cut for the middle class up to $250,000,” Axelrod said. That would be stimulative, because people who need money in their pocket to spend and pay for the things that they need to live would have more money in their pocket. That makes sense.” 

Except – it doesn’t make sense.  There are two problems with Axelrod’s comments.  1.) NOT getting a tax increase isn’t the same as getting a tax cut.  Does he really think that people will spend more because their taxes will stay the same?  2.) The Administration’s plan will raise taxes on small manufacturers – kicking the top rate up to nearly 40 percent.

In this case, we’re in agreement with Axelrod – this will mean more money coming out of businesses – meaning they have less money to pay for things…like wages and benefits.

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More Evidence for Preserving the 2001-2003 Tax Rates

As we’ve been saying for a long time now, if Congress really wants to create jobs, the first move should be to preserve the current tax rates. Taxes on investment income are often overlooked — they’re complicated and unfortunately too many folks in Congress think that they’re only for the rich.

Thus it’s worth paying attention to today’s Wall Street Journal column by economist Allen Sinai, “Cap Gains Taxation: Less Means More.” Sinai lays out a compelling case why keeping rates low — and even lowering them further — actually stimulates the economy and creates jobs.

Congress is set to act, sometime this fall, on legislation that will determine the rates for investment taxes. While we like Sinai’s idea of zeroing out the capital gains tax, we’ll settle for keeping both capital gains and dividends at the 15 percent rate. It’s certainly a good starting point.

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