In April, the Securities and Exchange Commission (SEC) put out a concept release on modernizing certain disclosure requirements in Regulation S-K, basically the guiding document for the disclosures that public companies must file in their periodic reports. The NAM took the opportunity to comment on the release, raising strong concerns with existing disclosures and also recommending against additional disclosures that add to the compliance burden without providing any additional benefits to investors. Read More
Though released as part of a package designed to curb cross-border mergers, the Treasury’s broad regulations do little to stop this activity. Instead, these efforts will have a significant negative impact on manufacturers in the United States while stifling investments, job creation and economic growth.
In this week’s Shopfloor podcast, National Association of Manufacturers (NAM) Vice President of Tax and Domestic Economic Policy Dorothy Coleman and NAM Senior Director of Tax Policy Carolyn Lee discuss the implications of these regulations.
The National Association of Manufacturers (NAM) has long believed that a public company’s board of directors is best positioned to responsibly oversee the effective operation and management of a company to maximize performance of the organization and provide long-term value to shareholders. Shareholders also have the means to communicate effectively with management through the current proxy process, annual meetings and other communications to ensure the smooth functioning of the business. However, there is another party that is becoming increasingly involved in the proxy process and companies’ overall corporate governance: proxy advisory firms. Read More
Earlier today, the National Association of Manufacturers (NAM) released the results of its second quarter 2016 Manufacturers’ Outlook Survey, showing an uptick in overall sentiment. In this survey, 61.7 percent of manufacturers expressed positivity about their own company’s outlook, up from 56.6 percent in March. This marks the most optimistic manufacturers have been since December 2015.
However, NAM Chief Economist Chad Moutray said, “While this survey offers a bit of optimism for manufacturers, there is still a dramatic need for improvement before our sector can regain its footing. This survey, coupled with the latest jobs report, should serve as a stark reminder to Congress that policy priorities, including market-opening trade agreements and comprehensive tax reform as well as addressing regulatory barriers, are top of manufacturers’ minds. If lawmakers in Washington take action on these and other items, they could help reverse the pain manufacturers are experiencing, expanding job opportunities and strengthening the broader economy as a result.” Read More
The disclosures that public companies must file with the Securities and Exchange Commission (SEC) are lengthy and burdensome, often overwhelming to both issuers and their shareholders. In recent years, policymakers have added to the information overload. For example, the Dodd-Frank Act enacted in 2010 mandates new “pay ratio,” “pay v. performance,” “clawback” and “conflict minerals” disclosure requirements, all of which are costly to prepare but do not provide investors with any useful information. Read More
The NAM today joined 23 other business organizations in sending a letter to Treasury Secretary Lew outlining the severe impact of recent debt-equity rules proposed by Treasury on global and domestic businesses of all sizes throughout the U.S. economy.
The far-reaching and unexpected proposal released by Treasury April 4 gives the government broad authority to recast related party debt as equity, imposing new taxes on businesses and threatening legitimate and well-established business practices, from corporate reorganizations to day-to-day cash management. While the proposal was released as part of a package of guidance designed to curb cross-border mergers, these extremely broad regulations have nothing to do with this activity and will have a significant negative impact on a wide range of global and domestic manufacturers in the United States. Read More
Manufacturers applaud Sen. Rob Portman’s (R-OH) leadership in introducing legislation to roll back recent aggressive IRS audit practices. The bill, S. 2809, would prevent the IRS from denying cooperative taxpayers access to the IRS Appeals Office in order to seek an independent review of the examination. In addition, the bill would limit the use of designated summonses to cases where a taxpayer is not cooperating with the IRS. The bill also would prevent the IRS from unilaterally extending the statute of limitations on an audit. Finally, manufacturers are pleased that the legislation would prevent the IRS from hiring outside law firms to assist in an audit and investigation of a corporate taxpayer. This practice has already been questioned by at least one court. Beyond the concerns about potential conflicts of interest that this practice raises, the fact that the IRS would outsource this inherently governmental function and expose confidential tax information to an outside entity is a real concern to manufacturers. The NAM urges Congress to take up this bill and put an end to these abuses once and for all.
PBGC premiums—the fees companies maintaining defined benefit (DB) pension plans pay to the Pension Benefit Guaranty Corporation (PBGC)—have been unexpectedly and unnecessarily increased several times over the past few years by more than $20 billion, with manufacturers paying roughly half that amount.
As a result, manufacturers and other companies with single-employer DB plans are paying millions of additional dollars to the PBGC that could otherwise be used to fund participant benefits or even job-creating business investments. Premiums have increased so often and so drastically in recent years that even the Obama administration—once a proponent for additional premiums in past budget proposals—called on Congress to pump the brakes in its recent budget proposal before these rising costs cause more companies to exit the DB system.
Though not necessary, PBGC premiums continue to increase for one reason: under current law, Congress can “pay for” other legislation by increasing premiums. In reality, the premiums are not actually paying for any legislation since companies pay premiums directly to the PBGC and no money flows to the general treasury for revenue. In essence, this is a budget gimmick that has a real negative impact on manufacturers and other sponsors of DB pension plans.
In an effort to refocus Congress on good governance and ease plan sponsors’ uncertainty, Congressman Jim Renacci (R-OH) introduced the Pension and Budget Integrity Act of 2016 (H.R. 4955) to take PBGC premiums “off budget,” thereby ending the desire for Congress to raise these fees to pay for unrelated legislation.
The NAM applauds Mr. Renacci and the original cosponsors—Reps. John Carney (D-DE), Richard Hanna (R-NY), Derek Kilmer (D-WA), Mark Pocan (D-WI) and Daniel Webster (R-FL)—for introducing this important pro-manufacturing legislation and will work with our allies in Congress to advance H.R. 4955.
Earlier this year, the NAM was quick to push back against the European Union’s (EU) plan to make public tax and profit reports for global companies operating in EU countries. Not only has the EU ignored our concerns, but it has proposed going one step further and extending the public reports proposal to so-called “tax havens,” which are to be determined by the EU.
Manufacturers believe that a fair and transparent tax climate helps boost living standards and economic growth everywhere. In contrast, requests for much more information than needed to assess a company’s tax liability, coupled with the public disclosure of this tax and financial information, will threaten economic growth and competitiveness on a global basis. Read More