I received an e-mail from the National Association of Manufacturers today. They need all manufacturers to support their efforts to enact legislation that will save US businesses and job. I sent the following letter to my local legislators. Please consider sending one yourself to help us save US jobs.
Dear Legislator:
On April 14-15, 2010, manufacturers from across the nation will be in Washington to participate in the National Association of Manufacturers' (NAM) Manufacturing Summit. All of the events during the Summit share one common goal: to meet with lawmakers on Capitol Hill and leave a durable impression of who we are, what we stand for and why manufacturing matters.
Although I'm unable to visit you in person, I fully support the message you will hear from your manufacturing constituents during the Summit.
Our nation's unemployment continues to hover at 10 percent, and many industrial sectors of the economy are still struggling to recover. Other nations are investing in technology, adjusting their tax codes and building their infrastructure to accommodate and attract manufacturing. The rules for success in the global economy are constantly changing, and manufacturers in America are all too often victimized by outdated policies that harm their ability to compete and provide high-paying jobs to American workers. The NAM is concerned about jobs and how quickly we can get America back to work. At the same time, we want to make sure we are spending, investing and improving America's ability to compete.
I urge you to address the following issues during the remainder of the 111th Congress:
A Growth Agenda for Creating Jobs: Our nation's unemployment continues to hover at 10 percent, and many industrial sectors of the economy are still struggling to recover. A new analysis, Jobs for America by the NAM and the non-partisan Milken Institute, examines ways in which we can create jobs. More than 11 million jobs can be created in the United States in this decade alone by changing key policies and making investments in energy, broadband and transportation infrastructure. As a manufacturer, I am concerned about jobs and how quickly we can get America back to work. At the same time, we want to make sure we are spending, investing and improving America's ability to compete. If Congress follows this roadmap, we will get America working again and we will make our nation a stronger competitor in the global marketplace.
R & D: Congress should act as soon as possible to restore and extend the R&D tax credit. More than 70 percent of credit dollars are used for salaries of R&D workers who are highly skilled. The lack of certainty with an on-again, off-again credit influences companies' future R&D budgets, particularly as many manufacturers are courted by other countries offering more generous and permanent R&D tax incentives. According to the Milken Report, making the R&D tax credit permanent and strengthening it would generate 316,000 manufacturing jobs and increase GDP by $206 billion (1.2 percent).
International Tax Policy: U.S. manufacturers currently face higher taxes than most of their competitors in other countries. Our statutory corporate tax rate is the second highest among developed nations, and the impact of our worldwide tax system increases the cost of doing business for U.S. corporations and costs American jobs. When our economy is struggling and thousands of jobs are lost every month, the Administration's proposed $122-billion tax increase on worldwide American companies would put them at a massive disadvantage and cost American jobs.
Tax Increases for Small and Medium-Sized Manufacturers: Unless Congress acts before the end of the year, small business owners will be facing billions of dollars in new taxes. The individual tax rate cuts enacted in 2001 and 2003, which dramatically lowered the tax rates on small business owners, are set to expire at the end of the year. The impact will be felt by a large number of job creators and the tax increases will stifle economic growth.
Labor Policy: Manufacturers oppose all votes on the jobs-killing Employee Free Choice Act (EFCA), including alternatives that limit the amount of time employees have to decide whether or not to form a union and limit employers' ability to communicate with employees. Congress should also oppose the Paycheck Fairness Act, which would add costs to employers through increased litigation and the Protecting America's Workers Act, which seeks to overhaul a bipartisan approach to promoting safer workplaces through cooperation between employers and OSHA.
The Sarasota-Bradenton area alone has seen the closing of almost all of our major manufacturing plants, these include Hi-Stat, Wellcraft, Parker-Hannifin, Cheetah Technologies, and more. Small to medium manufacturing plants are continuing to close on a daily basis and are too numerous to mention. Our company is competing for sales with global competitors. We have implemented lean manufacturing and are all working harder with less, so that we can keep our prices competitive. But we are not competing on an equal playing field. Our competitors are receiving government subsidies and these countries are adding duties to importing our products. The legislation you enact could be the catalyst that will save US manufacturing. A healthy US economy needs a balance of industries that include agriculture, finance, service and manufacturing.
Thank you for your consideration.
Sincerely,
Mrs. Margaret Bonura
Director of Sales & Marketing
New England Machinery, Inc.
Email: mbonura@neminc.com
The author, Marge Bonura, is the Director of Sales & Marketing for New England Machinery, Inc. (NEM). NEM is a leading manufacturer of bottle unscramblers, cappers, orienters, retorquers, lidders, pluggers, pump sorter/placers, scoop feeders, hopper elevators and much more. The company has been in business since 1974 selling to the food, beverage, pharmaceutical, personal care, chemical, household products, automotive and other industries. For more information on NEM, visit their website at www.neminc.com.
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Marge,
ReplyDeleteWe'd like to see the R&D tax credit made permanent as well. We'd also like to see more companies be able to receive the tax credit and have identified two significant issues with the existing R&D Credit regulations:
First, the regs are difficult to follow without a thorough understanding of the tax law. This often requires qualified US manufacturers to hire outside consultants to guide them through the details. Unfortunately, the cost of consultant support has made it prohibitive for many small to mid-sized manufacturers to benefit from these federal incentives. Today, tens of thousands of these manufacturers have historically bypassed this valuable tax credit.
Second, in 2008, the IRS elevated the R&D Credit to a Tier 1 Issue, which has put more emphasis on the need for contemporaneous documentation. To defend the R&D Credit in an audit, a taxpayer needs to qualify every R&D project under the regulations, AND identify costs associated with the project while the costs are being incurred (known as nexus). This documentation requirement is burdensome on engineers and production management staff, which makes capturing and defending the Credit a challenge for most manufacturers.
To address both these issues, we built Titan Armor – a low-cost software solution that helps manufacturers meet the current regulatory requirements for the R&D Tax Credit. You can get more information at www.titanarmor.com.