Both Chambers of Congress received a letter this morning signed by the NAM and over 500 organizations from the Broad Tax Extenders Coalition — a group representing millions of individuals, businesses of all sizes, community development organizations and non-profit organizations – urging Congress to work together during Lame Duck to extend seamlessly, enhance or make permanent the tax provisions that expired in 2013 and those expiring this year. (continue reading…)
As Members of the 114th Congress descend on Washington for orientation, and the 113th Congress convenes for the upcoming lame duck session, manufacturers stand ready to work with our leaders to advance policies that will enable us to continue to grow and create jobs. Manufacturers believe that now is the time to set aside the differences that have resulted in gridlock, and focus on the pro-growth policies that brought voters to the polls. Simply put, it is time to govern and grow. (continue reading…)
Since 1948, Unverferth Manufacturing has been working to improve and serve America’s farm operations. From humble beginnings as a company begun by a son and his father in their family’s barn manufacturing and marketing dual and triple wheel systems and components, Unverferth today is a leading manufacturer and marketer of tillage equipment, pull-type sprayers, grain carts and grain wagons, and agricultural dual and specialty wheels. Today the company has three manufacturing facilities: two in Ohio and one in Iowa and eight sales branches across North America. (continue reading…)
As part of “Investment Week” we want to highlight the role that pro-investment tax policy plays in the success of our nation’s manufacturing sector. These provisions are used by manufacturers large and small and are a particularly high priority for small and medium-sized manufacturers. In order to compete in a worldwide economy, manufacturers need to plan and invest and meet emerging needs. Extension of the pro-growth policies that expired at the end of 2013 would amount to a major step towards a tax code that will promote investment. (continue reading…)
The NAM has long advocated for pro-investment tax policies including investment incentives like enhanced Section 179 expensing, 50 percent first year expensing also known as “bonus depreciation” and provisions that allow companies to accelerate the use of AMT credits in lieu of bonus. (continue reading…)
The research and experimentation tax credit — aka the R&D tax credit — is intended to be an incentive for companies to invest in critical domestic R&D, which creates high-wage jobs here in the U.S. and leads to the innovative products and new technologies that are so important to our economy. Unfortunately, it’s been almost a year since the R&D credit expired, increasing costs and creating uncertainty for thousands of manufacturers conducting R&D. (continue reading…)
NAM continues to urge Congress to act on tax extenders as soon as possible as a bridge of certainty until comprehensive tax reform can be enacted.
The NAM is leading meetings with members of the House and Senate to call on Congress to act immediately when they return for the Lame Duck session to enact a package of over 50 expired and expiring tax provisions, typically called “tax extenders”. Several expired tax provisions are integral for manufacturers to innovate, grow, and compete in the global marketplace. These provisions include the R&D tax credit, enhanced Section 179 expensing, bonus depreciation, the “look-through” rule for controlled foreign corporations (CFCs), and deferral for active financing income. In the coming weeks, the NAM will outline in a series of Shopfloor Blog posts exactly how important these provisions are to the U.S. economy.
Manufacturers are not alone in calling upon Congress to act to restore the expired tax provisions immediately. Recently, IRS Commissioner John Koskinen wrote in a letter to Senate Finance Committee Chairman Ron Wyden (D-WY) that Congress should act on tax extenders no later than November to avoid disruptions and delays to the 2015 tax filing season. In the letter, Koskinen points out that the uncertainty in whether and when Congress may reinstate the expired tax provisions could delay the 2015 filing season and “delay the processing of tax refunds for millions of taxpayers.” The Commissioner also warned that waiting until 2015 to extend the provisions would be even more problematic.
NAM members echo these concerns, and want Congress to know that a failure to enact a retroactive extension of the tax extenders by the end of the year equates to a tax increase on U.S. manufacturers.
Yesterday the Center for American Progress released a report, “The Growing Consensus to Improve Our Tax Code” which “discusses some aspects of good tax policy that are endorsed on both sides and then identifies specific proposals for which consensus appears to be within reach.” While the NAM has long argued for comprehensive tax reform and is open to any and all efforts to find common-ground between both political parties as well as between the Congress and the Administration to achieve this critical goal, we take issue with the idea that the proposals included in this report is the common-ground that “could be implemented individually or as part of a package to advance other pressing economic priorities.”
This report, which simply identifies commonalities between the Administration budget proposals and base-broadening included in House Ways and Means Chairman Dave Camp’s “Tax Reform Act of 2014” discussion draft, ignores the underpinnings of both frameworks—lower tax rates in exchange for base-broadening. The report doesn’t however touch on the harm that would come from eliminating any or all of the “consensus” provisions absent a significant reduction in the corporate tax rate, or a shift to a competitive international tax system.
The reality is, comprehensive tax reform is essential to putting our still lagging economy on the fast-track to growth. There is broad agreement that our tax code is antiquated, uncompetitive and burdensome. However, there is not consensus on the the idea of using the revenues raised from base-broadening for any purpose other than reforming the tax code. Indeed, there are other points of consensus between the various tax reform proposals that have been floated in past years and that consensus should be used as the basis of a real effort to reform our tax code, not as a piggy bank for other ideas.
We were pleased to see the Senate Finance Committee on September 17th continuing to lay the foundation for comprehensive tax reform with a hearing entitled, “Reforming America’s Outdated Energy Tax Code.” Manufacturers are heartened by the focus on this critical part of the manufacturing –and national –economy since we consume more than 1/3 of the nation’s energy. At the same time, as we outlined in our statement for the Committee Record, we remain concerned about the misplaced emphasis on changes that would move the tax code away from encouraging capital investment and towards penalizing the sources of production that are not only leading to an energy boom in our nation but also putting the U.S. on track towards being energy self-reliant. The recent jump in domestic energy production has been a boon to our economy and has helped drive down costs for domestic manufacturers and making us more competitive.
It is critical that policy makers keep in mind that the amount of capital investment required to make our domestic reserves into domestic production is enormous and cost-recovery provisions in the tax code matters. The NAM has long called for comprehensive tax reform to include a robust capital cost recovery system. Some dismiss the importance of these provisions as simply a matter of timing, however when access to capital is tight and capital is limited, the ability to quickly recover investment costs is critical and allows companies to engage in additional projects sooner. These are the very types of provisions that enacted as part of pro-growth, pro-manufacturing, pro-job, comprehensive tax reform will help unleash the growth that our economy needs and help achieve the NAM’s goal of making the U.S. the best place in the world in which to manufacture.
The NAM continues to believe that recent M&A activity in the international arena strengthens the case for a comprehensive overhaul of the nation’s tax laws and the focus on regulatory fixes or targeted legislation is misplaced. While we will take a close look at the guidance released today by the Treasury department, comprehensive tax reform is essential to unleashing the economic growth we so badly need. The NAM will continue to ensure that Washington doesn’t change the discussion and keeps its focus where it belongs – on pro-growth, pro-competitiveness tax reform.
Dorothy Coleman is the Vice President of Tax and Domestic Economic Policy for the National Association of Manufacturers