If a series of proposed changes to the tax system, including a 25% corporate tax rate, were passed, 1 million jobs would be lost in the first two years, according to a new NAM study.
The data: The analysis—an update to NAM research released in April—considered a range of tax proposals that would change the tax system put into place by the 2017 Tax Cuts and Jobs Act. These included:
- A corporate tax increase from 21% to 25%;
- A reinstatement of the corporate alternative minimum tax;
- An immediate end to expensing of most investments in depreciable assets, to be replaced by the modified accelerated cost recovery system;
- An immediate repeal of the 20% deduction for certain pass-through business income;
- The taxation of capital gains and dividends at the same rate as ordinary income for taxpayers with incomes above $1 million, and the taxation of unrealized capital gains at death; and
- An immediate increase in the top individual tax rate from 37% to 39.6%.
Other findings: Along with the job losses, the NAM’s study also found that the changes would lower GDP by $107 billion in 2023, by $169 billion in 2026 and by $89 billion in 2031.
- Ordinary capital, or investments in equipment and structures, would be $70 billion less in 2023 and $70 billion and $51 billion less in 2026 and 2031, respectively.
Our view: NAM President and CEO Jay Timmons said, “Manufacturers are encouraged by the bipartisan negotiations continuing this week. Infrastructure investment and retaining competitive tax policies are a win–win for America. But there are some still advocating for increasing taxes on manufacturers—just not quite as much as the 28% proposed originally by President Biden. They might mean well, but that doesn’t change the fact that America will still lose jobs and investment in our communities at a time when manufacturers are working to build the post-pandemic world.”
Washington, D.C. – Ahead of the midterm elections, the National Association of Manufacturers released its policy roadmap, “Competing to Win,” a comprehensive blueprint featuring immediate solutions for bolstering manufacturers’ competitiveness. It is also a roadmap for policymakers on the laws and regulations needed to strengthen the manufacturing industry in the months and years ahead.
With the country facing rising prices, snarled supply chains and geopolitical turmoil, manufacturers are outlining an actionable competitiveness agenda that Americans across the political spectrum can support. “Competing to Win” includes the policies manufacturers in America will need in place to continue driving the country forward.
“‘Competing to Win’ offers a path for bringing our country together around policies, shared values and a unified purpose,” said NAM President and CEO Jay Timmons. “The NAM is putting forward a plan filled with ideas that policymakers could pursue immediately, including solutions to urgent problems, such as energy security, immigration reform, supply chain disruptions, the ongoing workforce shortage and more. Manufacturers have shown incredible resilience through difficult times, employing more workers now than before the pandemic, but continued resilience is not guaranteed without the policies that are critical to the state of manufacturing in America.”
The NAM and its members will leverage “Competing to Win” to shape policy debates ahead of the midterm elections, in the remainder of the 117th Congress and at the start of the 118th Congress—including in direct engagement with lawmakers, for grassroots activity, across traditional and digital media and through events in key states and districts as we did following the initial rollout of the roadmap in 2016.
The document focuses on 12 areas of action, and all policies are rooted in the values that have made America exceptional and keep manufacturing strong: free enterprise, competitiveness, individual liberty and equal opportunity.
Learn more about how manufacturers are leading and about the industry’s competitiveness agenda at nam.org/competing-to-win.
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.8 million men and women, contributes $2.77 trillion to the U.S. economy annually and accounts for 58% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org