Industry associations issued statements following the recent release of President Biden’s proposed fiscal 2024 budget plan:
(NAM) WASHINGTON, D.C. – National Association of Manufacturers President and CEO Jay Timmons released the following statement:
“There is no escaping the fact that the tax increases in President Biden’s new budget proposal would reverse the recent significant growth we’ve achieved in American manufacturing jobs and investment.
“After the 2017 tax reform made rates more competitive, manufacturers kept their promises to raise wages and invest in their communities. In fact, 2018 was the best year for manufacturing job creation in the previous 21 years. And in the past two years, as we rebuilt from the pandemic, we’ve created more jobs in the sector than at any point since the Reagan administration. So it comes as a surprise that President Biden, who has vocally championed manufacturing growth in pushing successfully for infrastructure investment and the CHIPS and Science Act, wants to pursue policies that would undo our progress.
“We have to get serious about competing with China; the president’s budget does the opposite. This proposal further undermines manufacturing in America by failing to reverse tax policies that make it more difficult for our industry to perform research, while China currently employs a 200% super deduction on R&D for manufacturing. It’s also now more expensive to buy critical machinery and finance new investments. If these lapsed deductions aren’t reinstated, it will mean lost jobs, less innovation and fewer opportunities for our communities.
“As manufacturers work to lead our economy forward, we also remain committed to lowering health care costs through market-based solutions that deliver choice and flexibility. Unfortunately, this administration’s insistence on imposing drug pricing requirements is an abdication of free market principles that poses serious risks to the development of new treatments and therapies—the very type of innovation that saves lives in America and around the world.
“Manufacturers are committed to growing investment, jobs and wages here in America. We need our government leaders to share that commitment.”
Background: Read more about how these critical tax priorities impact manufacturers across the country here.
(NAW) WASHINGTON, D.C. – The National Association of Wholesaler-Distributors (NAW) issued the following statement:
“President Biden’s announcement of over $4 trillion dollars in higher taxes is entirely unacceptable, and is classically bad fiscal policy,” said NAW CEO Eric Hoplin. “Once again, the burden of Washington’s out of control spending will be passed off to Main Street businesses and working families, who are already dealing with difficult economic situations caused by increased government spending. NAW strongly urges this Administration to reevaluate its position and cut back on the wasteful spending that continues to drive inflation in this country,” concluded Hoplin.
“The proposed tax increases in the President’s budget are a blatant attack on Main Street businesses and the families they support,” said NAW Associate Vice President for Government Relations Alex Hendrie. “President Biden’s proposed tax increases could not even pass when Democrats controlled both Houses of Congress and are totally detached from reality,” concluded Hendrie.
Proposed tax increases on the wholesale distribution industry include:
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- Increasing the 3.8 percent Net Investment Income Tax (NIIT) to 5 percent and applying it to all S-Corporation and partnership income above $400,000
- Increasing the top individual tax rate from 37 percent to 39.6 percent including on main street businesses organized as S-corporations and partnerships
- Raising the corporate tax rate from 21 to 28 percent
- Additional limitations on the ability of passthrough businesses to deduct business losses
- Doubling the top capital gains tax rate from 20 percent to 39.6 percent
Wholesaler-distributors already paid a 28.43% average effective tax rate in 2022. The average after tax profit margin for our industry is only 2%. If the President’s budget and his proposed tax increases are passed, wholesaler-distributors will face additional economic hardship and uncertainty which will have negative impacts on their businesses. With additional taxes, our members will have difficulty adding jobs or expanding benefits to their employees. This Administration will stifle economic growth and recovery once again due to reckless spending in this latest attempt to resurrect the already defeated Build Back Better Act.
Tagged with economy, NAM, NAW