Αn essential step towards building an stable and effective economy
Wisconsin manufacturers need simpler tax code, lower rates
By Dennis Slater
MILWAUKEE — Manufacturing remains the cornerstone of the American economy, but we cannot take that for granted. If we want to ensure Wisconsin and America’s continued manufacturing strength, the U.S. Congress should pass common sense, comprehensive tax reform.
Wisconsin benefits from the important role that manufacturing plays in our economy. Equipment manufacturers alone support about 100,000 jobs in Wisconsin, and generated almost $11 billion for our economy last year. Nationwide, the equipment manufacturing industry supports almost 1.3 million jobs.
Our industry includes a wide variety of businesses. Some equipment manufacturers are publicly traded, multinational corporations with multiple facilities in the United States and around the world. Other equipment manufacturing businesses are privately held, and might have plants in one or two states. Still others are smaller, family-held businesses that have stretched across several generations.
But what unites all of these businesses is their desire for sensible tax reform. We asked our members this year to consider a variety of reform options under consideration. The response was overwhelming: Equipment manufacturers say the tax code must be simpler and provide lower tax rates for all types of manufacturing businesses. And if we want tax reform to have a meaningful impact on our economy, it must also be permanent.
Comprehensive tax reform is important because in the three decades since the last major reform, the tax code has become increasingly convoluted, and it is more complex and uncompetitive than ever as a result.
At the same time, other countries — from industrialized nations to emerging competitors — have reduced their business tax burden to support their own manufacturers, who compete against our manufacturing businesses.
Our elected leaders have a once-in-a-generation opportunity to fix the tax code and put American manufacturers on a more competitive footing. Improving the competitive environment for American manufacturers also means protecting U.S. manufacturing jobs, and shoring up the potential growth in manufacturing jobs in the future.
The plan put forward by House Speaker Paul Ryan, R-Janesville, the White House and other leaders in Congress offers a good start: It would reduce the tax burden facing both those big manufacturers as well as small, family businesses. It would encourage investment in new machinery and no longer penalize multigenerational family businesses. At the same time, these proposals promise to make navigating our thicket of a tax code more straightforward for equipment manufacturers.
Those are worthy goals that Congress should advance on an expedient and bipartisan basis.
To be clear, tax reform is not a silver bullet for our economy. Our leaders in both Madison and Washington have more work to do to rebuild America’s infrastructure, help our rural economy, train our future workforce, and ensure that U.S. companies can compete fairly all over the globe.
But permanent, comprehensive tax reform is an essential step toward building an economy that puts equipment manufacturers in Wisconsin on a level playing field with their competitors across the globe. That is a worthwhile goal, one which our leaders in Congress should seek to achieve by the end of this year.
Speaker Ryan and the White House’s good start on reform would reduce the tax burden facing big manufacturers as well as small, family businesses. It would encourage investment in new machinery and no longer penalize multigenerational family businesses.
Slater is president of the Association of Equipment Manufacturers: www.aem.org.
