Tag: Max Baucus

Tax Targets: Today, Oil Companies; Tomorrow, Another Industry

The Senate Finance Committee has a hearing scheduled for Thursday, “Oil and Gas Tax Incentives and Rising Energy Price,” to which executives of a select few oil companies have been invited.

“Frankly, we are an attractive target,” said Ken Cohen, ExxonMobil’s vice president of public and government affairs. “I think the term I used was ‘irresistible’ right now for politicians to whale away.”

Cohen and Jaime Spellings, ExxonMobil’s vice president and general tax counsel, spoke this morning on a conference call for bloggers organized by the American Petroleum Institute. Much of the discussion centered on the issues of profits and taxes Cohen detailed in a recent post at ExxonMobil’s Perspectives blog, “ExxonMobil’s U.S. taxes and U.S. earnings – Some relevant numbers for Washington.”

Oil companies are today’s target, but other industries and the public at large should be concerned, Cohen argued.

I just hope that we can have at some point … some rational discussion of what the country’s tax policy should be. And other large industries should also take note, or actually any industry. (continue reading…)

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EPA Regulation: Consumers Also Feel the Higher Energy Costs

Jay Timmons, president of the National Association of Manufacturers, appeared in studio Wednesday on WLS’s morning drive-time program in Chicago, the “Don Wade and Roma Show.” A good interview with informed hosts that touched on several items including Illinois’ business climate, U.S. competitiveness, taxes and the pending Senate vote to block EPA’s regulation of greenhouse gases.

From the discussion of the latter (audio clip):

Timmons: The NAM is supporting the McConnell bill because it’s very definitive. It says the EPA cannot regulate greenhouse gases, and then Congress can then come back and create a law that would allow them to do that or do it in a way that Congress dictates.

Roma: It had originally been in Congress’ purview, and then the EPA did an end-run around when it ran into balky congressional leaders, right?

Timmons
: Well, that’s exactly right. A couple of years ago there was a bill that was on the House floor to regulate greenhouse gases, and it did pass the House, it stalled in the Senate. So Congress actually said, no, we’re not going to allow the regulation of greenhouse gases. And now you have the EPA saying, well, if Congress isn’t going to do it, we’re going to do it. So, hey, that’s a fun job to have.

Don Wade
: The reason we don’t want the EPA to tighten the screws on regulation on greenhouse gases is that it will increase the cost to manufacturers’ stuff. That stuff then will cost you, the consumer, more. It’s like a tax, only it’s not a tax. It’s a hidden tax.

Timmons: It’s a hidden tax that does raise the costs of all energy inputs into manufacturing. Manufacturing uses 30 percent of all the energy consumed in the United States to create those goods that you’re talking about that consumers buy. So you have one of two things happen. You either raise the costs of goods or manufacturers simply can’t compete, so jobs are lost.

And the other part of this is, it’s not just manufacturing. Somebody says, “Ah, let business pay,” well, this is also the consumer. This is also the retired…these are my retired parents, who are trying to pay their heating and cooling bill. And if you look at gas prices today, I don’t think anybody wants to pay more for energy costs.

WLS has posted audio of the full 12-minute interview here.

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As the Senate Vote Nears on EPA Overregulation…

The National Association of Manufacturers is running TV and radio spots urging Senators to vote for the amendment sponsored by Sen. Mitch McConnell (R-KY) to prevent the attempt of the Environmental Protection Agency to extend its control over the U.S. economy through its regulation of greenhouse gases.

The ads are available at the campaign’s website: www.nonewregs.org.

The NAM just sent a letter to the U.S. Senate urging Senators to vote for the McConnell amendment and opposing two alternative amendments that fail to achieve the desired goal: Protecting the U.S. economy, manufacturers and workers from costs of EPA overregulation. The amendments may provide a modicum of political cover, but they simply extend the uncertainty that threatens the U.S. economic recovery.

As NAM President Jay Timmons wrote in a blog post at The Hill, “A choice: Recovery or regulator?“:

Manufacturers have been proved a bright spot during the U.S. recovery, making new investments, hiring thousands of employees every week, and exporting more than other sectors of the economy. Yet uncertainty compels the companies to practice caution, holding off investments until it’s clear just how much control over the economy the EPA will wield.

When Senators vote on the McConnell amendment this week, they will be choosing between a private-sector led recovery and the uncertainty and costs threatened by an unrestrained regulator, the EPA. Manufacturers ask that the Senators embrace the recovery by voting for the McConnell amendment.

More …

(continue reading…)

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Only McConnell Amendment Limits Economic Risk from EPA Regs

The National Association of Manufacturers just distributed a letter to U.S. Senators urging their vote for Sen. Mitch McConnell’s amendment to block the EPA’s regulation of greenhouse gases. The letter also expresses opposition to two other amendments that threaten to deflect attention from the clear issue facing the U.S. Senate: Whether the EPA should circumvent the policymaking branch of government, Congress, to extend its regulatory authority over carbon dioxide and other greenhouse gases to the detriment of the U.S. economy, manufacturers, and workers.

The NAM letters comes from Aric Newhouse, senior vice president for policy and government relations. Text:

The National Association of Manufacturers (NAM), the largest manufacturing association in the United States representing small and large manufacturers in every industrial sector and in all 50 states, urges your support for legislation that will prevent the Environmental Protection Agency (EPA) from regulating greenhouse gas (GHG) emissions from stationary sources. To that end, the NAM key-voted Senator Mitch McConnell’s (R-KY) Energy Tax Prevention Act amendment (No. 183) to the SBIR/STTR Reauthorization Act of 2011 (S. 493).This amendment would stop EPA regulations that are costing jobs and hurting our nation’s economic recovery.
In addition, two other amendments that address GHG regulations were offered to S. 493 by Sens. Max Baucus (D-MT) (No. 236) and Jay Rockefeller (D-WV) (No. 215). While manufacturers appreciate the efforts of Sens. Baucus and Rockefeller, unfortunately, their amendments do not solve many problems associated with the EPA’s GHG regulations and provide little regulatory certainty for our nation’s job creators. (continue reading…)

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An Obvious Omission in President’s Good Remarks on Trade

President Obama’s weekend radio address built on his trip to Brazil, Chile and El Salvador to make the cause for expanded U.S. trade with Latin America. From the White House transcript:

Latin America is a part of the world where the economy is growing very quickly. And as these markets grow, so does their demand for goods and services. The question is, Where are those goods and services going to come from? As President, I want to make sure these products are made in America. I want to open more markets around the world so that American companies can do more business and hire more of our people.

Here’s a statistic to explain why this is important. Every $1 billion of goods and services we export supports more than 5,000 jobs in the United States. So, the more we sell overseas, the more jobs we create on our shores.

Absent from the President’s remarks is any mention of Colombia and the ever-pending U.S.-Colombia Free Trade Agreement. Colombia boasts the second largest economy in South America, so its omission from the address stood out.

Last month, Senate Finance Committee Chairman Max Baucus (D-MT) also traveled to Brazil and fittingly included Colombia in his South American journey. From the Finance Committee, Feb. 26, “Baucus Meets with Colombian President, Highlights Need for U.S.-Colombia FTA, Renewing Andean Trade Preferences“:

Washington, DC / Senate Finance Committee Chairman Max Baucus (D-Mont.) today met with Colombian President Juan Manuel Santos. (continue reading…)

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Hearing Set on Trade Pacts as Senators, WaPo Call for Action

From the Senate Republicans, @Senate_GOP:

At 3:30 ET today, Leader McConnell, Sen. Orrin Hatch, and Sen. @robportman will hold a press conference on free trade agreements.

Sens. McConnell, Hatch, and @robportman will call for immediate action from the president on pending free trade agreements.

Washington Post editorial, “Time to act on free trade:U.S. agreements with South Korea, Colombia and Panama should be approved — soon“:

The potential for a trade policy train wreck is real. Everyone needs to focus less on the political tit for tat and more on the policy case for getting these deals done as soon as possible, which is clear and strong. “It is time to identify the specific steps Colombia and Panama must take to move forward,” Mr. Baucus said Wednesday, “so we can finally approve our free-trade agreements with these countries, increase U.S. exports and create jobs here at home.” From a Democrat, that can hardly be considered unfriendly advice, and Mr. Obama would be wise to take it.

House Ways and Means Subcommittee on Trade, “Brady Announces First in a Series of Three Hearings on the Pending, Job-Creating Trade Agreements“:

Congressman Kevin Brady (R-TX), Chairman, Subcommittee on Trade of the Committee on Ways and Means, today announced that the Subcommittee will hold a series of hearings on the pending trade agreements with Colombia, Panama, and South Korea. According to the President’s own statements, these agreements have the ability to create over 250,000 American jobs. The first hearing will address the agreement with Colombia. The hearing will take place on Thursday, March 17, 2011, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 A.M. The Subcommittee will soon advise regarding hearings on the trade agreements with Panama and South Korea.

Testifying on behalf of the National Association of Manufacturers will be William D. Marsh, vice president legal – Western Hemisphere — for  Baker Hughes. Also scheduled to testify is Ambassador Miriam Sapiro of the U.S. Trade Representatives Office.

The USTR on Tuesday also hosts the American Chamber of Commerce in Korea on its annual visit to Washington, D.C. Last week U.S. and Colombian officials met in Washington to discuss the pending FTA. (Also here.)

The Miami Herald reports on President Obama’s upcoming trip to Brazil, Chile and El Salvador, “President Obama’s Latin agenda takes shape.”

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Senators Tell Administration: Move All Three Trade Agreements

U.S. Trade Representative Kirk testified on the President’s 2011 Trade Agenda at the Senate Finance Committee this morning. As expected, the focus was squarely on lack of progress on the Colombia and Panama free trade agreements. Unfortunately, despite an advance request by the Chairman and Ranking Member for a specific timetable on concluding the two agreements, Ambassador Kirk did not provide much of a road map on how the U.S. will proceed in addressing what the Administration feels are outstanding issues in both agreements.

U.S. Trade Representative Ron Kirk

When he appeared in front of the House Ways and Means Committee last month, Kirk promised the Administration wants to move the Korea trade agreement (KORUS) as soon as possible, and it would intensify efforts to resolve outstanding issues in the Colombia and Panama agreements so they could be moved as quickly as possible to Congress for approval –- by the end of 2011 if possible. At the time, we argued that all three agreements need to move as quickly as possible. We still absolutely believe this is the way things should proceed. The agreements with Colombia, Korea and Panama have languished since 2007, while our competitors in Europe and Asia continue to move aggressively to open those markets and gain preferential access for their manufactured goods exports.

The Chairman and Ranking Member of the Senate Finance Committee made it very clear they feel the same way. Chairman Max Baucus (D-MT) was crystal clear: “The time is long past to ratify the Colombia agreement,” said, continuing, “None of these agreements will pass unless they are all packaged together this year.” Ranking Member Orrin Hatch (R-UT) told Ambassador Kirk that he was tired of unfulfilled promises on Colombia and Panama. “It is the Administration’s inaction that speaks volumes – and these promises we’ve heard are inadequate,” the Senator said. Sen. Hatch pulled no punches in saying that he will view any attempt to move the KORUS FTA without action on Colombia and Panama in a very negative light. (continue reading…)

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In the President’s Budget: These Tax Increases Look Familiar

We read somewhere that President Obama had started reaching reaching out to business, recognizing  that you can’t have employees without employers, jobs without job creators. But the outstretched hand gets pulled back in the budget released today, at least on taxes.

From AP, “Obama budget resurrects rejected tax increases“:

WASHINGTON (AP) — President Barack Obama’s budget proposal resurrects a series of tax increases that were largely ignored by Congress when Democrats controlled both chambers. Republicans, who now control the House, are signaling they will be even less receptive.

The plan unveiled Monday includes tax increases for oil, gas and coal producers, investment managers and U.S.-based multinational corporations. The plan would allow Bush-era tax cuts to expire at the end of 2012 for individuals making more than $200,000 and married couples making more than $250,000. Wealthy taxpayers would have their itemized deductions limited, including deductions for mortgage interest, charitable contributions and state and local taxes.

We had this alternative headline in mind: “Obama budget message to business: ‘Psych!’”

And as stated many, many times during the lame-duck session, a majority of small manufacturers files as individuals under the tax code, meaning the proposed increases in the top bracket would in fact be a tax increase on small business. See our Nov. 16, 2010, post, “The Realities of Tax Increases on Small Business, Manufacturers.”

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Repealing the Onerous, Expensive 1099 Reporting Requirements

Sen. Max Baucus (D-MT) on Monday introduced a bill to repeal the onerous 1099 reporting requirements included in the Patient Protection and Affordable Health Care Act.

By Mr. BAUCUS (for himself, Mr. BEGICH, Ms. LANDRIEU, Ms. STABENOW, Mrs. SHAHEEN, and Mr. BROWN of Massachusetts):

S. 3946. A bill to repeal the expansion of information reporting requirements for payments of $600 or more to corporations, and for other purposes; to the Committee on Finance.

Sen. Baucus vowed its repeal in remarks in Missoula last week.

(Missoula, MT) – Montana’s senior U.S. Senator Max Baucus announced plans to introduce legislation to repeal new requirements for businesses to file forms with the IRS reporting payments for goods and services during a meeting in Missoula with state business leaders today.  Baucus told Montana business leaders he is working to nullify the provision in response to their concerns the requirement would place too large of a paperwork burden on small businesses.

“I have heard Montana businesses loud and clear and I am responding to their concerns,” Baucus said.  “Small businesses are the backbone of our economy, especially in Montana where we have more workers employed by small businesses than anywhere else in the country.  Montana businesses need to focus their efforts on growing and creating good-paying jobs – not filing paperwork.  Montana businesses have made clear these reporting requirements won’t work for them and it’s my job to fix that.  And that is exactly what I’m going to do.”

The Senate already missed an opportunity to repeal the provision in September, when during debate on H.R.5297, the Small Business Jobs and Credit Act, it rejected an amendment from Sen. Mike Johanns (R-NE) to repeal Section 9006 of the new health care law.

The roll call vote shows that Sen. Baucus and the new bill’s cosponsors all voted against invoking cloture on the Johanns amendment. Sen. Landrieu (D-LA) later introduced a bill to change the reporting trigger from $600 to $5,000.

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The Realities of Tax Increases on Small Business, Manufacturers

The populist talking points keep repeating themselves: No tax cuts for “the wealthy.”

The reality is that allowing the current tax rates to return to their pre-2001 levels will mean a major tax increase on many small businesses and manufacturers. From our ManuFacts sheet on the tax rates.

  • About 73 percent of all manufacturers are organized as S-corporations or other entities taxed at the individual rate.
  • Small and medium-sized manufacturers employ more than 9 million workers. Since 2007, these companies have lost more than 850,000 jobs – 42 percent of the total jobs lost in the goods-producing sector.
  • The Administration’s proposed 2010 budget blueprint would increase individual tax rates to nearly 40 percent.
  • Increasing taxes would deal a painful blow to small businesses recovering from the economic downturn and facing higher energy costs.
  • Manufacturers will lose an additional 238,000 jobs by 2019 if these tax increases are enacted, according to the NAM’s economic models.
  • In a March 2010 survey of small and medium-sized manufacturing firms, 86 percent said they were concerned about the expiring tax rates – of those, 62 percent said they were very concerned.

As for taxes generally and business taxes especially, here’s a letter the National Association of Manufacturers and other major business trade associations sent to Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, on Friday, Nov. 12. Excerpt:

During this time of widespread economic uncertainty, proposals to increase taxes on U.S. companies – including small businesses, domestic companies, worldwide American companies and U.S. subsidiaries of companies headquartered abroad – could have significant negative repercussions for the struggling American economy. Given the urgent need for new private sector jobs, adding to the tax
burden would only undermine vital economic recovery efforts now under way throughout the country.

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