The NAM is pushing back on a proposed “book tax” that would significantly raise taxes and penalize manufacturers for undertaking job creating investments across the country.
What it is: Included in the Build Back Better framework, the book tax imposes a 15% minimum tax on the financial statement — or book income — on corporations with over $1 billion in profits. The provision would be effective for tax years beginning after December 31, 2022.
Why it matters: Imposing a book tax would create a mandatory parallel tax system separate from the current corporate tax system—one that would deny accelerated depreciation (i.e. 100% bonus depreciation) that serves as a powerful pro-growth tool for manufacturers by reducing the after-tax cost of long-lived capital equipment purchases. Under a book tax such purchases would be deducted based on their useful lives.
- According to data from the nonpartisan Joint Tax Committee, the manufacturing sector leads all other sectors in the use of bonus depreciation, meaning that imposing a tax like this would disproportionately impact manufacturers.
What we’re saying: “Employing more than 12 million people who make things in America, paying employees nearly 24% more than the average for all businesses and having the largest economic impact of any major sector, the manufacturing industry has been helping to lead the economic recovery,” said NAM Vice President of Tax and Domestic Economic Policy Chris Netram. “However, imposing a book tax would not only undermine the recovery but also make it harder for the next manufacturing dollar to be spent in America, negatively impacting growth in family-supporting American manufacturing jobs.”
What we’re doing: The NAM is urging Congress to oppose the inclusion of a book tax in reconciliation legislation.
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