The National Association of Manufacturers’ vice president of tax and domestic economic policy, Dorothy Coleman, writes that manufacturers advocate keeping important tax provisions known as extenders while Congress reforms the current U.S. tax code to make it simpler, more competitive, and fairer.
Coleman writes in Real Clear Markets that manufacturers are strong and vocal advocates for reforming the tax code. “Manufacturers believe strongly that until policymakers agree on a final reform plan, it is important to keep the current tax system in place, including the so-called tax ‘extenders’,” Coleman writes.
Tax extenders refer to a bill to renew, for two years, $85 billion in tax provisions for individuals and businesses, a bill that likely could be taken up after Tuesday’s congressional elections. The legislation contains about 50 temporary tax provisions that ended Dec. 31, 2013, but would be renewed through 2015.
As part of its 2014 Federal Legislative Agenda, the Business Council of Alabama advocates the passage of comprehensive tax reform that will lower the corporate tax rate (currently 35 percent, the highest in the developed world), enabling American companies to compete for investment across the globe and not stand idle while other nations move into those markets.
Coleman advises that piecemeal changes to long-understood and practiced rules will create more uncertainty into business planning, making manufacturers in the United States even less competitive and threatening economic growth and U.S. jobs.
“It’s clear to us that tax extenders are not a replacement for tax reform, but continuing existing policy will not remove the incentive for tax reform or tie the hands of future Congresses,” Coleman writes.
Coleman advises that piecemeal changes to long-understood and practiced rules will create more uncertainty into business planning, making manufacturers in the United States even less competitive and threatening economic growth and U.S. jobs.
She said top priorities for manufacturers are the research and development credit, investment incentives for manufacturers of all sizes, deferral for global active business financing income and the “look-through” rules that make it easier for companies to redeploy earnings from active businesses in foreign markets. “These provisions help manufacturers innovate and compete in a global marketplace and contribute to U.S. economic growth and job creation,” she writes.
Provisions important to families include a deduction for local and state taxes and a provision that allows taxpayers to exclude mortgage loan forgiveness from income, she writes.
Coleman writes that manufacturers recognize the critical need to change temporary provisions of the tax code and create a more competitive tax climate that allows manufacturers to succeed in the global marketplace.
“In fact, renewing longstanding tax policy will ease the way for much needed tax reform by injecting some certainty in the current system and giving policymakers the time to complete work on a pro-growth, pro-manufacturing comprehensive overhaul of the tax system.
“As we move toward tax reform, it is critical that Congress revive and extend these important incentives that are part of the current system and avoid making an uncompetitive system even worse,” Coleman writes.
The Business Council of Alabama is the exclusive representative in Alabama of the National Association of Manufacturers, an organization of 11,000 manufacturing companies and nearly 12 million people who make things in America. It advocates sensible government policies that will reduce the cost of production and tear down barriers to growth.
-Dana Beyerle