NAM makes statement on President's budget proposal.
Press Release Summary:
According to NAM's Executive VP, Jay Timmons, manufacturers and their workers are disappointed that Obama Administration's budget proposal for fiscal year 2011 discourages job creation by adding new costs to business. President's budget calls for almost $500 billion in new taxes on businesses over next 10 years. Manufacturers support President's proposal for extending key international and investment tax provisions that expired last year and his recommendation to make R&D credit permanent.
Original Press Release:
NAM Statement on President's Budget Proposal
Manufacturers Say President's Budget Proposal Will Stifle Growth
Administration's budget proposal increase costs for manufacturers of all sizes
WASHINGTON, D.C.,-The National Association of Manufacturers (NAM) Executive Vice President Jay Timmons issued the following statement in reaction to the Office of Management and Budget's release of President Obama's budget for fiscal year 2011:
"Manufacturers and their workers are disappointed that the Administration's budget proposal for fiscal 2011 discourages job creation by adding new costs to business. The President called his budget a 'blueprint for job creation and economic growth' but it puts costly burdens on America's job creators. Our nation's unemployment rate continues to hover at 10-percent with many of the industrial sectors of the economy still struggling to recover from the recession.
The President's budget calls for almost $500-billion in new taxes on businesses over the next 10 years including:
o A tax rate hike of almost five percentage points for many small and medium size businesses;
o $59 billion in new taxes on established businesses that hold inventory;
o A $122 billion tax increase for U.S. companies with worldwide operations;
o A $19 billion reinstated "Superfund tax" on most corporations; and
o An additional $39 billion in new taxes on energy companies.
These tax increases will only create more costs for manufacturers - making it difficult for them to retain and create jobs in this fragile economy, and to be able to compete with other countries where their governments do not impose such burdens.
Government doesn't create jobs - business does. America needs policies that encourage job creation and help us to be more competitive in the global economy.
Manufacturers support the President's proposal for extending some key international and investment tax provisions that expired last year and his recommendation to make the R&D credit permanent. We hope Congress will move quickly on these extenders and establish a permanent, strengthened R&D credit. Based on data from a Milken Institute study that the NAM commissioned, increasing the R&D tax credit by 25 percent and making it permanent would create 316,000 manufacturing jobs and would boost real GDP by 1.2 percent.
We also appreciate the President's proposals on investing in infrastructure, broadband and energy security. It is vitally important for economic as well as global competitive reasons that we upgrade America's infrastructure including inland waterways, our Air Traffic Control System, and Smart Grid. By doing so, we can create 11 million jobs this decade both directly and through the ripple effects of such projects. But we can't have government agencies curb the process through long approval permitting process or regulation.
We were disappointed the President's budget doesn't do much to foster an environment of growth. For example, we can create even more jobs by reducing our corporate tax rate, and modernizing the U.S. system of export controls. The U.S. has the second highest corporate tax rate among the other major industrial nations. By reducing our U.S. corporate income tax rate to match the average of other industrial nations we would create an additional 350,000 jobs and boost GDP by 2019 to $375.5 billion according to the Milken Institute's study. By modernizing our export controls in high-value areas, we would create 160,000 jobs and enhance real GDP by $64 billion, the study shows.
As the President pointed out in his State of the Union Address, the true engine of job creation in this country will always be America's businesses. However, his budget proposals make it difficult for businesses to grow and remain competitive in an environment that puts many burdens and costs on them.
We look forward to working with the Administration and Congress in the coming months as they look towards creating jobs and promoting economic growth in this country."
The National Association of Manufacturers is the nation's largest industrial trade association, representing small and large manufacturers in every industrial sector and in all 50 states. Visit www.nam.org for more information.
