Policy and Legal

Policy and Legal

How Tax Reform Helped a Manufacturer Expand

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INX International, a global manufacturer of high-performance printing inks and coatings, has a strong and growing presence in the U.S. thanks to tax reform.

The company’s success has been made possible in part by tax reform’s lower corporate tax rate and a foreign-derived intangible income (FDII) deduction, which encourages companies to develop and keep intellectual property in the U.S. by providing a lower tax rate for foreign sales based on U.S. IP. These reforms have helped manufacturers like INX invest in their U.S.-based facilities and employees—and INX has done exactly that.

Manufacturers wanted: From 2017 to today, the company has hired 89 people—a 7% increase in personnel. And even with the significant increase in workers, INX has been able to use its tax savings to pay good wages and benefits for all its employees.

  • “We have not had one year since 2017 without raises or an increase in benefits,” said INX Vice President of Tax and Finance David Rossi. “That’s because the company has been doing pretty well—reaping the benefits from the economy and tax reform.”

Facilities expanded: INX has also worked to build new production capabilities, financed in part by the 2017 changes to the tax code.

  • “The FDII deduction gave us $1.1 million in 2020 alone,” said Rossi. “That’s two-thirds of a solid equipment buildout for a new location. That number is significant to us.”

IP kept local: Provisions like the FDII deduction have made it possible for INX to keep their intellectual property in the United States, rather than moving critical production to facilities in other countries where labor and production costs might be lower.

  • “We’re brick-and-mortar manufacturing in the U.S., and we keep our IP here; we keep our R&D here,” said Rossi. “Our ideas are here. Everything is developed here in the United States and kept in the United States.”

Continued benefits: The highly competitive labor market means that INX is also using its tax reform savings to attract and retain workers—making stability and certainty around these tax rules even more important.

  • “We have dramatically increased starting wages, due to competition for manufacturing workers,” said INX CEO John Hrdlick. “Employees hired last year are also getting an increase. We’re offering incentives for referrals for new positions and spending a fair amount of money to recruit and keep people and stay ahead of our competition. If we weren’t in a strong position now, we wouldn’t be able to do that.”

The road ahead: The team at INX is concerned about what might happen if tax reform were to be rolled back and their tax burden were to increase. Especially with ongoing shortages of labor and materials—and with delays in shipping and freight transport—higher taxes would make it more difficult to continue the kinds of investments they have made.

  • “Right now, any savings get invested into our people and our operations,” said INX Chief Financial Officer Bryce Kristo. “Any loss will negatively affect that.”
  • “If there’s change, you’re talking about smaller facilities, less expansion or no expansion at all,” said Rossi.

The last word: “We are in a very competitive industry and an important industry,” said Hrdlick. “We’re almost a $500 million company, but given the high competitiveness, we are in single-digit operating income. All these proposed tax increases will pull some of that away. Everything we get, we invest in our people—and if that number is dramatically impacted, that’s going to be a problem for us.”

Policy and Legal

The NAM Looks Ahead

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As Congress reconvenes this fall, the NAM will continue to make sure manufacturers’ priorities are front and center, driving the legislative conversation and shaping America’s future. We spoke with the NAM’s policy leaders to get a sense of the agenda going forward and discussed two bills in particular that are on manufacturers’ radar.

Bipartisan infrastructure reform: The $1.2 trillion investment would fund roads and bridges, as well as upgrades of the electric power grid and energy infrastructure, passenger and freight rail, public transit, airports, water systems, broadband and other critical priorities. Many of the bill’s investments were also initially highlighted in the NAM’s Building to Win framework—the NAM’s plan to invest in America’s infrastructure. The NAM will continue to work with Congress and President Biden to help move this bill across the finish line and ensure we can build the world-class infrastructure manufacturers deserve.

  • “It’s critical that this moves forward,” said NAM Senior Vice President of Policy and Government Relations Aric Newhouse. “The bipartisan infrastructure reform bill would create transformative change—and every day that passes without it is a lost opportunity for manufacturers.”
  • “We are using our influence to call on Congress to finalize this bill and move it to the president’s desk,” added NAM Vice President of Infrastructure, Innovation and Human Resources Policy Robyn Boerstling. “We also intend to stay engaged after it’s signed into law. This is a significant federal investment, with a lot of new programs and opportunities—and the NAM will be here to help steer our members through the implementation process.”

Reconciliation: Democrats are considering a multitrillion-dollar reconciliation bill that would supplement the bipartisan infrastructure reform bill with additional priorities in areas like health care, climate change and labor rules. As this bill moves ahead, the NAM is focused on preventing changes in corporate taxes, individual taxes, estate taxes and international tax policy that could harm manufacturers; blocking policies that could damage the employer–employee relationship; and standing up against efforts to stifle innovation in the pharmaceutical sector.

  • Taxes: The bill proposes more than $2 trillion in tax increases that could hit every segment of the manufacturing economy. Proposed changes could affect big corporations through corporate taxes; globally engaged firms through changes to the Global Intangible Low-Taxed Income (GILTI) provision, the Base Erosion and Anti-Abuse Tax (BEAT) and a more limited incentive to locate intellectual property in the U.S.; family-owned businesses through estate tax reforms and increases to the capital gains rate; and small and medium manufacturers through changes to the tax system for pass-through entities. The bill would also make it harder to finance new equipment purchases through new limitations on the deductibility of interest on business loans.
  • “These changes would affect every manufacturer, increasing the burden on corporations and pass-through entities,” said NAM Vice President of Tax and Domestic Economic Policy Chris Netram. “And we intend to stand up for our members, so that big and small manufacturers alike can compete, invest and grow here in the United States and around the world.”
  • Pharmaceutical innovation: The reconciliation bill also contains provisions that would introduce price controls on certain medicines and harm the capacity to innovate by making it more difficult for pharmaceutical companies to invest in research and development, potentially hampering the creation of new medications and treatments. The NAM is fighting against these provisions to ensure that pharmaceutical companies are able to robustly invest in lifesaving cures.
  •  “Congress must take the long view on innovation,” said Newhouse. “If we take steps that harm pharmaceutical companies’ ability to innovate today, fewer lifesaving drugs will be available in the future. We think that’s a mistake.”
  • Labor: In addition, the reconciliation bill in its current form seeks to impose some of the provisions of the Protecting the Right to Organize Act, or PRO Act. The bill, which previously passed the House in 2020, has the potential to reshape the relationship between employers and employees. The NAM will work to ensure these changes are not included.
  • “The PRO Act is so broad and so sweeping in terms of its changes to the employee–employer environment that it comes at the expense of the manufacturing sector,” said Boerstling.
  • “We’re going to do everything we can to keep this out of reconciliation because we believe the existing employee–employer relationship is working,” said Newhouse. “Now is not the time to blow it up with antiquated approaches to labor policy.”

The bottom line: This fall promises to be a busy time for policymakers in Washington, and the NAM intends to keep them focused on the needs and priorities of manufacturers across the country.

Press Releases

Manufacturers React to Recovery-Stunting Tax Hike Proposal

Newhouse: “There’s no getting past the fact that this tax plan adds up to fewer jobs for American workers.”

Washington, D.C. – Following the release of the House Ways and Means Committee’s plan to increase taxes on manufacturers through the budget reconciliation legislation, National Association of Manufacturers Senior Vice President of Policy and Government Relations Aric Newhouse made this statement:

“There’s no getting past the fact that this tax plan adds up to fewer jobs for American workers. We know from experience that competitive tax rates spur job creation, higher wages and investment in communities. That’s exactly what we saw after the 2017 Tax Cuts and Jobs Act as manufacturers kept their promises. 2018 was the best year for manufacturing job creation in more than two decades. We also know from rigorous economic analysis that reverting to archaic tax policies has the opposite effect. A study of proposed tax increases—including a 25% corporate rate—found that America would lose 1 million jobs in just the first two years.

“Building a strong economy takes more than wishful thinking; it requires a competitive business environment. Manufacturers are committed to rebuilding our economy and sustaining our recovery—even amid the surge of COVID-19 cases. If lawmakers share that commitment, then they would rethink tax proposals like this. Few policies would stall our recovery faster. Now is not the time to pursue policies in Washington that will hurt the families and communities of manufacturers in America.”

Study: Negative Consequences of 25% Tax Rate on Manufacturers:

(Source: Dynamic Estimates of The Macroeconomic Effects of Tax Rate Increases and Other Tax Policy Changes)

  • 1 million jobs and $107 billion in GDP lost in first two years
  • 500,000 jobs lost on average each year over the next decade

Manufacturers on Increasing the Tax Burden:

(Source: NAM’s Q3 Manufacturers’ Outlook Survey)

  • Nearly 94% of manufacturers said that higher taxes would be harmful to their businesses.
  • Roughly 90% of respondents said that their company would find it more difficult to expand their workforce, invest in new equipment or expand facilities if the tax burden on income from manufacturing activities increased.
  • Nearly 91% said that higher taxes would also make it more difficult to raise employee wages.

Manufacturing growth following the enactment of 2017 tax reform:

  • In 2018, manufacturers added 263,000 new jobs. That was the best year for job creation in manufacturing in 21 years. (U.S. Bureau of Labor Statistics)
  • In 2018, manufacturing wages increased 3% and continued going up—by 2.8% in 2019 and 3% in 2020. Those were the fastest rates of annual growth since 2003. (U.S. Bureau of Labor Statistics)
  • Manufacturing capital spending grew 4.5% and 5.7% in 2018 and 2019, respectively. (U.S. Census Bureau)
  • Overall, manufacturing production grew 2.7% in 2018, with December 2018 being the best month for manufacturing output since May 2008. (Federal Reserve Board)

-NAM-

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 12.3 million men and women, contributes $2.35 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector 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

Press Releases

Manufacturers Share Commitment to Vaccination

Requirements Must Be Structured in a Way That Does Not Negatively Impact the Operations of Manufacturers

Washington, D.C. – Following President Biden’s speech on new measures to combat COVID-19, National Association of Manufacturers President and CEO Jay Timmons released this statement:

“Americans can be grateful to President Trump for ‘Operation Warp Speed’ that enabled the United States to develop the lifesaving vaccines against COVID-19 and to President Biden for his continued focus on getting Americans vaccinated. We share their steadfast focus, and manufacturers have led the way in promoting the lifesaving COVID-19 vaccines. They are safe and effective vaccines made for us, by people like us—manufacturers in America.

“We look forward to working with the administration to ensure any vaccine requirements are structured in a way that does not negatively impact the operations of manufacturers that have been leading through the pandemic to keep Americans safe. It is important that undue compliance costs do not burden manufacturers, large and small alike.

“Getting all eligible Americans vaccinated will, first and foremost, reduce hospitalizations and save lives. But it is also an economic imperative in that our recovery and quality of life depend on our ability to end this pandemic. This is why the NAM and The Manufacturing Institute continue equipping manufacturers of all sizes with resources to promote vaccination through our ‘This Is Our Shot’ project.”

-NAM-

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 12.3 million men and women, contributes $2.35 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector 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

Press Releases

Manufacturers: Tax Hikes Will Cost Manufacturing Jobs

9 in 10 Manufacturers say higher taxes would make it more difficult to raise employee wages, invest in new equipment and hire more workers

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons released this statement following U.S. Department of Commerce Secretary Gina Raimondo’s address to the City Club of Cleveland:

“Secretary Raimondo correctly notes that ‘too many Americans feel like they’ve been left behind,’ but returning to archaic tax policies of the past would set Americans back even further. Manufacturers kept their promises to raise wages and invest in their communities after the 2017 tax reform law. Why would anyone want to undo that progress?

“The proposed tax increases would result in 1 million job losses in just the first two years. Manufacturers agree with Secretary Raimondo that we want to give ‘all American workers an opportunity to participate in our economy,’ and we believe in building an opportunity society. But we need continued strong job creation to make that possible—especially as we continue to battle COVID-19.

“The right approach is a bipartisan one—just as President Biden and senators from both parties achieved on infrastructure. Smart investments that don’t impose job-destroying tax increases is the path forward. Lawmakers who choose the more destructive path—the one that jeopardizes family-supporting American manufacturing jobs—will need to explain why they want to undo our historic progress. In 2020, President Biden called on U.S. manufacturing to be ‘part of the Arsenal of Prosperity today.’ We are committed to answering that call, but we need the tools—including competitive tax rates—to achieve that goal.”

Manufacturers on Increasing the Tax Burden:

(Source: NAM’s Q3 Manufacturers’ Outlook Survey)

  • Nearly 94% of manufacturers said that higher taxes would be harmful to their businesses.
  • Roughly 90% of respondents said that their company would find it more difficult to expand their workforce, invest in new equipment or expand facilities if the tax burden on income from manufacturing activities increased.
  • Nearly 91% said that higher taxes would also make it more difficult to raise employee wages.

Background on manufacturing growth following the enactment of 2017 tax reform:

  • In 2018, manufacturers added 263,000 new jobs. That was the best year for job creation in manufacturing in 21 years.
  • In 2018, manufacturing wages increased 3% and continued going up—by 2.8% in 2019 and 3% in 2020. Those were the fastest rates of annual growth since 2003.
  • Manufacturing capital spending grew 4.5% and 5.7% in 2018 and 2019, respectively.
  • Overall, manufacturing production grew 2.7% in 2018, with December 2018 being the best month for manufacturing output since May 2008.

-NAM-

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 12.3 million men and women, contributes $2.35 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector 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

Press Releases

New NAM Report Highlights the Impact and Importance of Pharmaceutical Manufacturing

Timmons: Pharmaceutical manufacturers are essential to America’s health and well-being and to the success of our economy.

Washington, D.C. – After the publication today of the National Association of Manufacturers’ latest report, Ensuring a Healthy Future: The Impact and Importance of Pharmaceutical Manufacturing,” NAM President and CEO Jay Timmons released the following statement:

“Pharmaceutical manufacturers are essential to America’s health and well-being and to the success of our economy. They have helped lead our country through crisis, fight the pandemic and drive our recovery. The sector creates hundreds of thousands of jobs, and the work its quarter of a million employees perform is literally lifesaving, improving society in ways that are almost impossible to overstate.”

The report finds that not only have pharmaceutical manufacturers been pioneers in improving the human condition, but the industry also fuels other sectors of the economy.

According to the report:

  • Pharmaceutical and medicine manufacturing directly employs an estimated 267,000 workers in the United States and supports nearly 1.9 million more jobs across the country.
  • One job in the industry helps support six other jobs in the overall workforce.
  • Pharmaceutical and medicine manufacturing generates nearly $339 billion in output. Further, $1.00 in pharmaceutical and medicine manufacturing output generates $1.09 in output elsewhere in the economy.
  • For every $1.00 earned by an employee within the industry, $2.42 is earned by others elsewhere in the economy.

“The American public and policymakers too often overlook these accomplishments,” Timmons added. “Traditional economic analysis ignores the way this industry extends and enriches lives, and the public is not fully aware of pharmaceutical manufacturers’ constant focus on innovation and improving the quality of life for everyone. Pharmaceutical manufacturers are always researching, discovering and developing new medicines and treatments, operating at the core of our modern health care system. Their products make it possible for medical professionals to introduce and manage innovative new therapies, and of course, these manufacturers helped create lifesaving COVID-19 vaccines. Moreover, the industry has high economic multipliers that drive production and job creation in other industries.”

Additional Key Findings:

  • A successful pharmaceutical ecosystem requires strong private-sector investment. 
    • In 2019, American pharmaceutical companies invested more than $83 billion in research and development, topping off nearly $1 trillion in R&D investment over the past 20 years. A recent study from the National Science Foundation’s National Center for Science and Engineering Statistics estimates that the pharmaceutical and medicine manufacturing sector alone accounts for roughly 17% of total R&D investment in the United States.
    • The pharmaceutical industry invests nearly 11.4% of its sales back into R&D. Indeed, the U.S. pharmaceutical industry invests on average roughly three times more in R&D as a percentage of sales than all other manufacturing industries.
  • The industry creates valuable STEM jobs.
    • While roughly 6.7% of the U.S. workforce has a STEM occupation, 29.9% of all jobs in pharmaceutical and medicine manufacturing are STEM related. The pharmaceutical manufacturing sector employs more than four times the percentage of STEM workers employed in the overall workforce.
  • Industry employees are highly productive.
    • Industry employees produce $1.3 million in output per employee. This is nearly seven times greater than the U.S. economy’s average output per employee ($188,000).

-NAM-

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 12.4 million men and women, contributes $2.44 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector 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.

Press Releases

Tax Hikes, Workforce Challenges Top of Mind for Manufacturers

NAM Launches Campaign to Oppose Tax Hikes

Washington, D.C. – The National Association of Manufacturers released its Manufacturers’ Outlook Survey for the third quarter of 2021, showing manufacturers remain mostly optimistic in their economic outlook (87.5%, down from 90.1% in Q2). Consistent with Wednesday’s Bureau of Labor Statistics report showing a record 889,000 job openings in manufacturing, respondents named workforce shortages (81.5%) as their top downside risk. Manufacturers also indicated the many ways that proposed tax increases threaten jobs, investment and growth in the sector.

The NAM is also launching a six-figure ad campaign calling on Congress to protect manufacturing jobs by opposing tax increases in the budget resolution. The print, radio and digital ads will run in Washington, D.C., and in key states across the country.

“This survey delivers an urgent warning for lawmakers: if you raise taxes on manufacturers, there will be no avoiding widespread job losses, slower growth and wage stagnation,” said NAM President and CEO Jay Timmons. “At a time when paychecks for manufacturing families are growing at the highest rate in nearly 40 years, the tax increases under consideration by Congress will directly harm the men and women who make things in America. Like the New York manufacturer that hired 50 new workers, doubled the size of their manufacturing facilities and increased employee wages by nearly 5%, manufacturers across the country are keeping our promises after the 2017 tax reforms, investing in our people and our communities. To protect our recovery, we should all want to protect these reforms.

“The worsening workforce crisis, demonstrated in this and many previous surveys, is the driving motivation behind the NAM and Manufacturing Institute’s Creators Wanted campaign, which we will be ramping up even further in the coming months to tackle this challenge. With a record 889,000 open jobs in manufacturing and 4 million to fill by 2030, this is the largest campaign ever to build the workforce of tomorrow and inspire, educate and empower a new generation of manufacturers in America.”

Other survey highlights:

  • Nearly 94% of manufacturers said that higher taxes would be harmful to their businesses.
  • Roughly 90% of respondents said that their company would find it more difficult to expand their workforce, invest in new equipment or expand facilities if the tax burden on income from manufacturing activities increased.
  • Nearly 91% said that higher taxes would also make it more difficult to raise employee wages.
  • The top three challenges facing manufacturers are increased raw material costs (86.4%), attracting and retaining a quality workforce (80.0%) and supply chain challenges (79.8%).
  • Respondents predicted employment and wage growth to rise at the fastest rates in the survey’s 24-year history.

Read the full Q3 2021 Manufacturers’ Outlook Survey results here.

Background on manufacturing growth following the enactment of 2017 tax reform:

  • In 2018, manufacturers added 263,000 new jobs. That was the best year for job creation in manufacturing in 21 years.
  • In 2018, manufacturing wages increased 3% and continued going up—by 2.8% in 2019 and 3% in 2020. Those were the fastest rates of annual growth since 2003.
  • Manufacturing capital spending grew by 4.5% and 5.7% in 2018 and 2019, respectively.
  • Overall, manufacturing production grew 2.7% in 2018, with December 2018 being the best month for manufacturing output since May 2008.

-NAM-

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 12.3 million men and women, contributes $2.35 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector 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

Policy and Legal

NAM Launches Manufacturers United

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With major policy issues coming to a head this fall in Washington, the National Association of Manufacturers this week launched Manufacturers United – a new digital platform to power the industry’s grassroots advocacy.

We spoke with some of the people behind the effort to learn more about what it does, how it works, and why manufacturers across the country should use it to highlight their priorities and make their voices heard.

What it does: Manufacturers United provides a clear platform and a wide range of easy-to-use tools for individual manufacturers to take action to advance the industry’s policy priorities:

  • “Manufacturers United is the central resource where manufacturers, those who work in our industry and everyday Americans who care about the future of manufacturing in the United States can come together and take meaningful action, said Assistant Vice President for Advocacy at the NAM Michael O’Brien. “Congress is currently working on urgent priorities ranging from infrastructure investments to revisiting tax reform. Manufacturers United gives you the tools and resources — from posting key messages to social media, sending a message to your representative, all the way to helping you attend a congressional town hall, or host a member at your facility — that help you take action.”

A helping hand: In addition to giving manufacturers the tools to advocate for their causes, Manufacturers United also offers access to members of NAM staff who can help you navigate and make effective use of these advocacy tools and opportunities.

Why it matters: Research shows that persistent, sustained advocacy is incredibly important – and that outreach from individual constituents has the most impact, especially when policymakers are undecided on an issue. MU unleashes the power of manufacturers who have been interested in advocacy, but haven’t known where to start.

“The NAM will always be there to serve up full and comprehensive information on policy matters and other leading issues, but we’re seeing a real hunger from our members to actually join the fight,” said NAM Grassroots Strategist Alex Przybelski. “Manufacturers United helps them scale campaigns themselves and move their issues forward.”

How it works: Manufacturers United is designed to help individuals take a number of actions in support of manufacturing priorities. A few ways to plug in are:

  • Get up to speed and take action on current issues like fighting new taxes on manufacturers, advancing historic infrastructure investment, and other major issues
  • Sign up by texting MU to 52886 for updates about the major issues MU is working on (or just visit the homepage and sign up)
  • Get to know the NAM staff who can help you put these tools to work

The bottom line: “Manufacturers United is about harnessing the power of manufacturing voices,” said O’Brien. “What’s at stake, fast facts and useful statistics, how to take action – it’s all there to help individual manufacturers find information and act on it to create an impact.”

Learn more: Find out more at www.manufacturersunited.org.

Press Releases

ICYMI: NAM’s Jay Timmons Discusses Creators Wanted, COVID-19 Vaccines and Reconciliation on CNBC

Watch Jay Timmons on CNBC

Timmons on Labor Shortages, Creators Wanted Campaign

“Let’s be upfront about it. We have a very severe worker shortage in our country right now. It’s why the NAM has been so focused on our Creators Wanted campaign, to attract that next generation of manufacturing workers, and we are in competition now all across every sector for workers.

“So, if you think about supply chain shortages, why is that happening? Part of it certainly is the pandemic and the ability for trade to move freely, but you also have issues of not enough people at factories producing the component parts that go into finished products. What does that lead to? That leads to higher prices. So, it’s a supply and demand issue. Jim Cramer earlier today talked about a focus on getting this worker shortage under control. He mentioned, for instance, one possibility of helping to deal with this is immigration reform and that he thinks that there is a potential bipartisan solution to that. I believe there is as well. We have been pushing that through our program called A Way Forward at the NAM for a number of years. We think that’s one thing that will help get the economy back and deal with some of these issues.”

Timmons on Separating Infrastructure Investment from the Budget Resolution

“I think it was an extraordinary achievement by the Senate, a bipartisan achievement by Republicans and Democrats to get that bill across the line. We said at the NAM from the start that we would see probably about $1.2 trillion without punishing and archaic tax increases that would take us back to a time when we weren’t able to invest and hire and grow wages like we have for the last three years…We think that this bipartisan solution needs to get across the finish line. This is a very big priority not only for the president, but also for the American people. We know that can get done.

“…the reconciliation package that may be being developed…we have some serious concerns. We will certainly oppose any of the archaic tax increases that have been discussed. We are hearing somewhere between $1.8 and $3.5 trillion on job creators in America. That would take us to where we were before the 2017 tax reforms, where, afterwards, as I said, we were able to have record investment, record job creation, record wage growth. Why would we ever want to undo that? We are watching that very closely. We will oppose the bill with any of those factors in there. We will oppose the pharmaceutical issues that are in those bills that will stop us from being able to deal with the next pandemic. And we are going to oppose the labor provisions that would drive a wedge between management and our workers. There are a lot of things in that bill we don’t like. But infrastructure, BIF as it’s called in Washington speak, needs to get across the line right away. It’s an accomplishment we can all be proud of.”

Timmons on the NAM’s Vaccine Mandates

“I am so proud of the NAM team…We had a…94% vaccine acceptance rate before we imposed the mandate, and since then…we have achieved 100%. And I am thrilled because our team cares about not only themselves and their families, but also the people that we interact with every day—our 14,000 member manufacturers across the country. It’s the responsible thing to do, and I am happy that team NAM came through.

“What I hear from every single CEO that we represent is that their number-one concern is their employees, the health of their employees, the health of their employees’ families and their communities…It’s become political at times, but it doesn’t need to be. The last administration through Operation Warp Speed helped develop a vaccine in just record time with all the safety protocols in place. This administration is executing the vaccinations across the country. It’s a bipartisan effort, a nonpartisan effort, I would say, to make sure that our communities are safe, that our country is safe and the world can return to normal. It’s the only way it’s going to happen—we know that.”

-NAM-

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 12.4 million men and women, contributes $2.44 trillion to the U.S. economy annually, has the largest economic multiplier of any major sector 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.

Policy and Legal

Nephron Pharmaceuticals Keeps Promises After Tax Reform

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Nephron Pharmaceuticals Corporation, a West Columbia, South Carolina–based manufacturer, has been instrumental in helping American hospitals during the pandemic. The company produces inhalation solutions and suspension products, as well as prefilled sterile syringes, vials, IV bottles and IV bags. Meanwhile, Nephron also launched a COVID-19 diagnostics lab and vaccination center last year and recently announced plans for a new U.S. plant that will produce medical-grade nitrile gloves.

It is thanks to the Tax Cuts and Jobs Act of 2017 that Nephron has been able to keep investing in its workforce and facilities. Nephron President, CEO and Owner Lou Kennedy recently spoke to us about the company’s expansion and the benefits of the tax reform law’s provisions.

An early start: Nephron didn’t wait to begin sharing the benefits with its employees. Within days of tax reform’s passage, the company announced that employees would receive a 5% raise.

An expanded workforce: Tax reform also helped the company grow over time, from its pre–tax reform size of 485 employees.

  • Today, the company has nearly 1,200 full-time employees and almost 800 more part-time employees, including educators, interns and apprentices—a massive expansion that shows no signs of stopping.
  • In fact, Nephron expects to have 400–500 jobs to fill in the next 12 months alone.

In addition, the company skews young and diverse—around 53% of the workforce are women, more than 36% are people of color, and the average employee age is about 35.

Offering good jobs: The company now offers a starting salary in the range of $17 per hour. Meanwhile, it has also increased its long-term incentives and bulked up its 401(k) plan.

Growing operations: In addition to its workforce expansion, Nephron is using the benefits of tax reform to invest in its facilities and expand its footprint.

  • The company is in the midst of five multimillion-dollar projects, including one worth $215 million that Nephron has said was made possible by tax reform. This project will bring 380 new full-time jobs to the surrounding area by 2024 and add new office, warehouse and production space as well as a vaccine production facility.

How tax reform helped: Nephron is organized as a pass-through entity, which helped the company benefit from the lower top tax rate (37%) that tax reform offered. It also benefited from the 20% pass-through deduction and a full expensing provision that allows for the immediate deduction of equipment purchases.

  • The tax code’s research and development incentives, including R&D full expensing, have also been hugely important to Nephron, helping it develop the therapies that stop COVID-19 in its tracks.

The last word: “Since the Tax Cuts and Jobs Act passed, we have plowed dollars back into our businesses and our workers,” said Kennedy. “We would certainly have to pump the brakes if tax reform were to be rolled back. We’re hopeful that Congress and the administration will leave tax reform in place to incentivize domestic manufacturing.”

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