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tax reform Archives - Shopfloor

GDP Grows at Fastest Rate Since 2014, with Tax Reform Powering Manufacturers Forward

By | Economy, Shopfloor Economics, Shopfloor Main | No Comments

The Bureau of Economic Analysis said that the U.S. economy grew by an annualized 4.1 percent in the second quarter of 2018, the best reading since the third quarter of 2014 and up from 2.2 percent growth in the first quarter. Robust growth in consumer and business spending and exports boosted the data. Since the end of the Great Recession, the U.S. economy has expanded 2.2 percent on average. Moving forward, real GDP should grow by roughly 3 percent in 2018, which would be the strongest growth rate since 2005.

Indeed, over the past six months, tax reform and regulatory relief have sparked the robust manufacturing job growth manufacturers predicted. The business optimism of our member companies stands at a record high, and 86 percent of them plan to invest in new plants and equipment, 77 percent plan to increase hiring, and 72 percent plan to increase wages and benefits for workers. That is driving the robust growth we are now seeing reflected in today’s report, placing an urgent need to grow and upskill the manufacturing workforce. Read More

Congress’ Top Tax Writer to NAM: “Pro-Growth Tax Reform Would Not Have Occurred but for Your Leadership”

By | Economy, Shopfloor Economics, Shopfloor Main, Taxation | No Comments

On the six-month anniversary of the passage of the Tax Cuts and Jobs Act, Congress’ top tax writer praised the National Association of Manufacturers (NAM) and President and CEO Jay Timmons in a Capitol press conference for the organization’s advocacy.

“Thank you to Jay for your leadership of America’s manufacturers,” said House Ways and Means Committee Chairman Kevin Brady (R-TX) as Timmons, House Speaker Paul Ryan (R-WI) and Treasury Secretary Steven Mnuchin looked on. “This pro-growth tax reform would not have occurred but for your leadership.”

Earlier that day, the NAM released its latest quarterly Manufacturers’ Outlook Survey in conjunction with the anniversary. The results were eye-popping: more than 95 percent of manufacturers surveyed were optimistic about their business outlook—the highest rating in all of the survey’s 20-year history.

Speaker Ryan and Chairman Brady echoed the record-setting results.

“Today there is record optimism among our nation’s manufacturers,” said Ryan. “Tax reform, to be blunt, is the game-changer our economy needed.”

“Our manufacturers are now armed with one of the most pro-growth tax codes in the world. And since tax reform was signed into law, over 70 percent of manufacturers have increased hiring and their workers’ wages due to tax reform,” said Brady.

Marlin Steel Wire Products President and Owner Drew Greenblatt and Jamison Door President and CEO John Williams, both NAM members, also participated in the press conference, along with workers from each company’s shop floor. The full event can be viewed here.

Conducted by NAM Chief Economist Chad Moutray, the Manufacturers’ Outlook Survey has surveyed the association’s membership of 14,000 large and small manufacturers on a quarterly basis for the past 20 years to gain insight into their economic outlook, hiring and investment decisions and business concerns.

The NAM releases these results to the public each quarter. Further information on the survey is available here.

Manufacturers Added 36,000 Workers in August, the Fastest Monthly Gain in 5 Years

By | Economy, Shopfloor Economics, Shopfloor Main | No Comments

The Bureau of Labor Statistics said that manufacturers added 36,000 net new workers in August, its fastest monthly gain in five years and increasing for the third consecutive month. In addition, the June and July data were revised higher, increasing employment in the sector by a total of 19,000 more than originally estimated. As such, manufacturing was a bright spot in the latest jobs data—a sign that the sector has rebounded from global headwinds over the past two years.

Indeed, over the past nine months, manufacturing employment has risen by 155,000, averaging 17,222 per month. That is a definite improvement following the loss of 16,000 workers on net for 2016. Moreover, total manufacturing employment rose to 12.48 million, rising by 1.03 million since the Great Recession and its highest level since January 2009.

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Just the Facts: Tax Reform Will Boost Manufacturing

By | Shopfloor Main, Taxation | No Comments

A recent study from the Institute for Policy Studies seems to assert that businesses with lower tax rates were not job creators. Specifically, they analyzed “92 publicly held U.S. corporations that reported a U.S. profit every year from 2008 through 2015 and paid less than 20 percent of these earnings in federal corporate income tax.” They then assert that those 92 firms lost 1 percent of their workforce in that time frame versus a 6 percent gain for the U.S. private sector as a whole.

The authors use this analysis to suggest that pro-growth tax reform will not produce the positive employment benefits that its advocates, including the NAM, assert. But, this misses the point. You cannot extrapolate the tax burdens of 92 firms to the larger economy, mostly because there are a variety of reasons why those individual firms might have paid lower tax rates in those years, including deductions for losses in prior years.

The important point—missed in this paper—is that American businesses are at a competitive disadvantage globally, with marginal tax rates in the United States higher than any other major economy. We need pro-growth tax reform—an idea that has bipartisan support. Read More

Manufacturers Have Added 16,000 Jobs in July, Averaging 12,500 Workers per Month Since November

By | Economy, Shopfloor Economics, Shopfloor Main | No Comments

The Bureau of Labor Statistics reported that manufacturers added 16,000 net new workers in July, extending the gain of 12,000 workers June. (June was estimated originally to be a gain of just 1,000 workers, and the May data were also revised from a decline of 2,000 to 0.) The July increase in manufacturing was the fastest since February, and the sector has now increased employment in seven of the past eight months. Over that eight-month span (since November), manufacturers have averaged 12,500 new jobs per month—definite improvement from the loss of 16,000 workers on net in 2016. In July, there were 12,425,000 manufacturing workers. At the same time, average weekly earnings for manufacturing workers rose from $1,086.30 in June to $1,092.03 in July, up 2.8 percent over the past 12 months from $1,062.02.

In another sign that manufacturing jobs are on the rise, Toyota announced today that it will build a $1.6 billion U.S. assembly plant to develop electronic vehicle technologies. The plant opening in 2021 will produce up to 300,000 vehicles per year and employ 4,000 manufacturing workers. Read More

Senate Taxwriters Advance Nomination of Top Treasury Tax Official

By | Shopfloor Policy, Taxation | No Comments

The Senate Finance Committee today approved the nomination of tax expert David Kautter to be assistant treasury secretary for tax policy, clearing the way for Senate confirmation of the nominee to a post where he will play a key role in the tax reform debate.

Over the past several months, tax reform meetings between the House, Senate and administration have heated up and having Kautter in place at Treasury will bring additional technical expertise to these discussions and hopefully help speed up the process. As a liaison to the IRS, he will also play a major role in the current effort underway to repeal or rewrite a number of tax rules issued during the previous administration.

Kautter, whose nomination was put forth by President Donald Trump in May, is extremely well qualified for the job. He serves as partner-in-charge of RSM’s Washington national tax practice. Earlier in his career, he was managing director of the Kogod Tax Center and executive-in-residence at the Kogod School of Business at American University. Before holding this position, he spent more than 30 years at Ernst & Young, serving as director of national tax for more than 13 years.

Advancing pro-growth tax reform and rolling back anti-manufacturing tax regulation are two top priorities for the National Association of Manufacturers, and time is running out on both. Having Kautter in place as the assistant treasury secretary for tax policy will be key to advancing these two initiatives. We strongly urge the Senate to confirm his nomination without delay.

How Manufacturers Are Making Progress in Washington

By | Media Relations, Shopfloor Main, Shopfloor Policy | No Comments

Three months ago, I joined a group of business leaders in a meeting with President Donald Trump at the White House. We had a frank discussion about what businesses in America need to create jobs, compete around the world and grow our economy.

We focused especially on issues like regulatory reform and infrastructure, and since that meeting, the National Association of Manufacturers (NAM) has continued to provide the administration with manufacturers’ perspectives. We sent a report on regulations to the Commerce Department, and we continue to advocate the solutions found in our “Building to Win” agenda.

I shared a similar message in a round of television interviews in New York this week. On CNBC, NAM President and CEO Jay Timmons and I talked about manufacturers’ priorities with the “Squawk Box” audience (You can watch parts one and two of the interview here and here.)

The other hot topic for manufacturers right now, of course, is tax reform. Earlier this month, I was on Capitol Hill to testify before Congress about manufacturers’ priorities for tax policy. I discussed the principles laid out in “Competing to Win” and urged our elected leaders to act in a bold way. “We operate in a fiercely competitive global economy, and we need a fiercely competitive tax system to win,” I reminded them.

It can get lost in the news, but manufacturers really are making progress on our big-ticket items. We have an administration who is listening to us and has already acted to ease the regulatory burden. On Capitol Hill, Sens. Rob Portman (R-OH) and Heidi Heitkamp (D-ND) have introduced a bipartisan regulatory reform bill. President Trump released his tax reform blueprint, and Congress is holding hearings to begin the process. In addition, the administration is expected to release an infrastructure plan soon, after previously citing our “Building to Win” blueprint favorably.

If we keep up the hard work and keep speaking out, we can seize this opportunity and get real results for manufacturers—and our whole country.

Vice President–Elect Mike Pence Meets with Manufacturing Leaders at NAM Headquarters

By | Communications, Shopfloor Main | No Comments
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Vice President-elect Mike Pence speaks to the National Association of Manufacturers’ (NAM) Executive Committee. From left: Tenneco Chairman and CEO and NAM Board Chair Gregg Sherrill, Pence and NAM President and CEO Jay Timmons. Photo by David Bohrer/NAM

 

 

Vice Presidentelect Mike Pence met with the members of the NAM’s Executive Committee, a group of the country’s most influential manufacturing leaders, at the NAM’s headquarters in Washington, D.C., today.

They had a wide-ranging and robust conversation about the policies needed to create jobs and support working families by growing manufacturing in the United States. They discussed the need to work together to deliver tax reform, make necessary investments in our infrastructure, address regulatory burdens, rethink how regulations are developed, rein in health care costs and unleash our energy resource.

The vice presidentelect asked the NAM to help their administration prioritize which regulations should be reviewed for possible repeal that will best help support and grow manufacturing jobs in America. Manufacturers also communicated to the vice presidentelect their appreciation of the president-elect’s willingness and commitment to constructively engage with manufacturing leaders and support manufacturing to create jobs and a better business climate in the United States.

 

When Manufacturing Succeeds, America Succeeds

By | Shopfloor Main, Shopfloor Policy, Taxation | No Comments

The National Association of Manufacturers (NAM) is releasing in-depth Competing to Win policy papers to equip Congress and the Trump administration with blueprints for delivering on manufacturers’ priorities. Today’s release is the second in the series and focuses on tax. For more on the NAM’s 12 Days of Transition, follow @ShopfloorNAM.

If there is one single issue that could have the greatest positive impact on manufacturing overall, tax reform is likely that issue.

As it stands today, our tax code is dragging down manufacturers and holding us back. We have the highest corporate tax rate in the world, and some small manufacturers that are structured as S-corporations and file as individuals pay tax rates greater than 40 percent, which is absurd.

Our goal needs to be making the United States the most attractive place to manufacture and invest, and we will make great strides in that direction through pro-growth tax reform.

In the NAM’s “Competing to Win” agenda, released in early 2016 and now updated with in-depth policy blueprints, we lay out very clearly the problems and solutions for our elected officials, and we have shared this with President-elect Donald Trump’s transition team.

For manufacturers, a tax reform plan must include:

  • Reduced tax rates on corporate and pass-through business income;
  • A robust capital cost-recovery system;
  • Strong research and development incentives; and
  • Modern, competitive international tax rules.

A study released by the NAM in January 2015, titled A Missed Opportunity: The Economic Cost of Delaying Pro-Growth Tax Reform, found that comprehensive tax reform that includes this multipronged pro-growth tax package would substantially grow the economy and result in increased jobs and investment. Over a 10-year period, this pro-growth tax reform plan would:

  • Increase GDP by more than $12 trillion relative to Congressional Budget Office projections;
  • Increase investment by more than $3.3 trillion; and
  • Add more than 6.5 million jobs to the U.S. economy.

Our outdated system is taking a toll on our economy. Just look at recent years’ slow growth, static investment and an employment rate that does not match our growth potential. Manufacturers stand ready to be the solution in generating economic growth that we have not seen in a very long time. We are not just identifying the problems, we are being the solution. After all, when manufacturing succeeds, America succeeds.

To view the blueprint, click here.

 

This blog is part of the NAM’s 12 Days of Transition series, an effort to provide the presidential transition team and other Washington policymakers with a roadmap to bolster manufacturing in the United States. Read the other blogs in the series here.

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