NAM Addresses Key Issues with Biden Tax Plan
Manufacturers Push Back on Harmful Tax Increases
The NAM is leading a campaign opposing the more
than $2 trillion in proposed tax increases
that are currently a part of the budget bill. By comparison, 2017 tax reform
reduced taxes by a net amount of approximately $1.4 trillion.
The impact on SMMs: Here are some of the provisions that could be included in a final bill:
- The corporate tax rate increases from 21% to 26.5% ($540 billion tax increase).
- Top individual income tax rate increases from 37% to 39.6% ($170 billion tax increase).
- The 20% pass-through deduction is essentially eliminated ($78 billion tax increase).
- A 3.8% Medicare surtax is applied to business income greater than $400,000 (single)/$500,000 (married) ($252 billion tax increase).
- New 3% surtax on individuals (including pass-throughs) with incomes greater than $5 million ($127 billion tax increase).
- Top capital gains tax rate increases from 20% to 25% (but total top rate of 31.8% with surtaxes on higher income taxpayers) ($123 billion tax increase).
- Estate tax exemption is reduced from roughly $23 million for married couples down to $10 million ($54 billion tax increase).
- New limits placed on Grantor Trusts ($8 billion tax increase).
What the NAM is saying: “There’s no getting past the fact that this tax plan adds up to fewer jobs for American workers,” said NAM Senior Vice President of Policy and Government Relations Aric Newhouse in a statement. “We know from experience that competitive tax rates spur job creation, higher wages and investment in communities. That’s exactly what we saw after the 2017 Tax Cuts and Jobs Act as manufacturers kept their promises. 2018 was the best year for manufacturing job creation in more than two decades. We also know from rigorous economic analysis that reverting to archaic tax policies has the opposite effect. A study of proposed tax increases—including a 25% corporate rate—found that America would lose 1 million jobs in just the first two years.” Newhouse appeared on Fox Business earlier this week to push back against these proposed increases.
What the NAM is doing: The NAM is sparing no effort to make sure we defeat proposed tax hikes on manufacturers—but we need your help. Already, the NAM team has a campaign underway in key lawmakers’ states and districts highlighting how tax hikes put manufacturing jobs at risk.
How to get involved: Manufacturing leaders can get involved in a couple of key ways:
- Register for a special briefing on the NAM’s campaign against tax increases on manufacturers on Wednesday, Sept. 22, at 1:30 p.m. EDT. The meeting will include a legislative update and the opportunities to take action to oppose tax hikes. The NAM will also share tools and resources to support your advocacy.
- Join hundreds of other small manufacturers and local, state and national organizations in sending a powerful joint message to Congress in opposition to tax hikes. You can also join other SMMs in sharing your tax reform story, through Manufacturers United, on how manufacturers have kept their promises to create jobs, increase wages and invest in their facilities and communities.
Briefing for pass-throughs: The NAM’s Pass-Through Working Group will also be meeting on Sept. 22 at 4:00 p.m. EDT on the state of play on tax increase proposals affecting pass-throughs. The meeting will feature a briefing from an EY tax expert on Senate Finance Committee Chairman Ron Wyden’s (D-OR) 39-page draft bill that would make important changes to partnership tax rules (Subchapter K), specifically relating to partnership distributions, allocations and gain recognition rules. You can find a one-page summary of the draft bill here and click here for a section-by-section summary. These changes, which are the most significant ones in more than 30 years, are estimated to raise $172 billion over 10 years and are intended to help pay for the reconciliation bill. Click here to register.
NAM Urges Policymakers Not
to Raise Energy and Supply Chain Costs