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AMT Member Testifies on Tax Reform
Aug 8, 2012
The House Ways & Means Committee recently held a hearing on Tax Reform and the U.S. Manufacturing Sector. The purpose of the hearing was to examine how the current tax system affects U.S. manufacturers and how comprehensive tax reform might affect their ability to grow and create jobs.
Testifying on behalf of AMT - The Association For Manufacturing Technology, former AMT Chairman Kim Beck, President and CEO, Automatic Feed Company, voiced frustration that President Obama and Congressional Democrats would risk another recession by increasing taxes on small manufacturers at a time of lackluster economic growth and persistently high unemployment.
“I just spent four years trying to save my company,” Beck told committee members. “Small manufacturers are angry that, after they made such great sacrifices, they are now being asked once again to finance a government that is too large, too inefficient and fiscally irresponsible.”
The president and the Democratic leadership have proposed letting the Bush-era tax cuts expire for incomes over $250,000, while GOP leaders have called for an extension of all of the tax cuts. The Bush tax cuts plus dozens of tax measures, including reduced estate tax levels, expire at the end of this year. Other provisions – the R&D tax credit, 100 percent bonus depreciation, and increased Sec. 179 expensing levels – have already expired.
“When are our elected leaders going to realize that a tax increase on those who report higher incomes is a direct tax increase on manufacturers like me? “ Beck asked. “Partnerships, LLCs, sole proprietorships and Subchapter S corporations are a significant share of those who are considered ‘wealthy’ under tax law, because they file individual income taxes.”
Beck urged the committee to act decisively in the short term and extend 100 percent bonus depreciation, increased Sec. 179 expensing levels and the R&D tax credit now, explaining that reducing these incentives for 2012 and beyond effectively increased the cost of research and job-producing capital investment just as the economy is showing signs of life. He also pressed the committee to find the political courage to tackle long-term reform next year that includes lower rates for corporations and individuals, reasonable estate tax levels, full expensing of capital equipment purchases and a permanent R&D tax credit.
Both the House and the Senate held a series of symbolic votes on full or partial extension of the tax cuts and expiring provisions before the recess, but with little time to pass a bill before November 6, all eyes are on a post-election lame duck session. At the moment, there is no telling what that final tax bill of the 112th Congress will look like, but there will be plenty of discussion about what it should look like in the lead-up to elections. Now is the time to let your voice be heard.
Mr. Beck and the other witnesses didn’t waste their opportunity to share their experiences and views on short-term and comprehensive tax reform during the somewhat contentious hearing. As committee members sought to define their positions, which at times were at odds with those testifying, the witnesses, from manufacturing companies large and small, stood firm that the tax code was hampering their ability to compete and create jobs.
AMT’s Board of Directors has also weighed in. The Board sent a letter to Congress urging that all of the Bush tax cuts be extended until the time comes to tackle long-term reform, hopefully next year.
With Congress in recess this month, take advantage of the opportunity to explain how the tax code and tax policy discussions in Washington are impacting you and your business.
If you need help scheduling an appointment or writing a letter, contact Amber Thomas at athomas@AMTonline.org. To read Mr. Beck’s and other witness written testimony, visit the committee web site at waysandmeans.house.gov.