The National Association of Manufacturers (NAM) represents manufacturers in every industrial sector and in all 50 states.
As with most other associations, they have a government affairs group to work with the powers that be in Washington DC. At the end of July, NAM wrote a letter to Congress urging them to support H.R. 8 – the Job Protection and Recession Prevention Act. I was not aware of this bill but found NAM’s letter on tax policy very interesting.
These are some of the key points that we found intriguing:
- “Without action before the end of the year to extend today’s lower rates, the vast majority of manufacturers in the United States will face higher taxes……….the possibility of these tax increases has forced many manufacturers to put investment and hiring plans on hold.”
- “About two-thirds of manufacturers in the United States operate as S-corporations or other pass through entities and pay taxes at individual rates.”
- “The lower rates enacted in 2001 and 2003 have placed a key role in helping these companies – most of which are small and medium-sized manufacturers (SMMs)……survive challenging economic times…..Raising taxes on these SMMs is counterproductive particularly as we face persistently high unemployment rates and stagnant economic growth.”
Remke Industries is a 50-year old, privately-held manufacturer and depending upon which definition you use we’re either a small or medium-sized company. During the economic downturn we have held our own. We continued investment in product development, marketing and sales although with reduced budgets for a couple of years. Instead of layoffs we instituted a small across-the-board reduction in pay for all employees – yes, all. In 2011 with sales starting to rebound, we invested in our infrastructure with a second building that enabled us to expand our production & inventory capacity as well as our engineering and inside sales teams.
Are we concerned about the possibility of higher taxes on our business and what the impact might be? Yes. Has the possibility of higher taxes affected our planning for 2012? Yes. Like the majority of Americans, we are disappointed in Congress and dislike the bitter partisan divide that keeps compromise impossible. And we know, as you do, that nothing much will happen during this fall due to the election. But given the state of the US economy we do agree with this statement in the NAM letter:
“By extending current lower tax rates for all Americans for one year to provide time for Congress to complete comprehensive tax reform, H.R. 8 would provide manufacturers with the confidence to make the investments necessary to create and sustain jobs.”
Do you agree with the NAM statement about lower tax rates? Why or Why Not? Let us know – and please ‘LIKE’ and ‘SHARE’ this blog with your friends & colleagues. And as always, thanks for subscribing to EVERYTHING’S CONNECTED.
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