Tax extenders legislation is key to keeping U.S. manufacturing strong
The U.S. Senate has passed a $42 billion package of tax incentives on a vote of 76-16. The bill extends dozens of lapsed breaks for the year 2014, bet sets them to expire in 2015. The bill now awaits President Barack Obama’s signature.
The House of Representatives agreed to extend a host of expired tax provisions. The measure sailed through with a vote of 378-46.
Latest update: The U.S. Senate has passed a $42 billion package of tax incentives on a vote of 76-16. The bill extends dozens of lapsed breaks for the year 2014, bet sets them to expire in 2015. The bill now awaits President Barack Obama's signature.
The National Tooling and Machining Association (NTMA) and the Precision Metalforming Association (PMA) had been urging Congress to pass a tax extenders bill making key tax provisions used by U.S. manufacturers - including the R&D Tax Credit and Section 179 Expensing - permanent, and extending Bonus Depreciation for all of 2014 and 2015. These tax provisions, which Congress allowed to expire last year, help NTMA and PMA members and thousands of other manufacturers across the country make investments in technology and hire more workers.
While PMA and NTMA had hoped for a multi-year tax extenders package at a minimum, the bill passed by the House extends these provisions for only one year - retroactively for 2014. Last month, PMA Member Wes Smith, who is president and CEO of E&E Manufacturing in Plymouth, MI, testified in a briefing at the House of Representatives. He said that companies like his rely on key tax provisions to have the resources available to make investments and hire more employees. "If we knew at the beginning of this year that Congress would not extend Bonus Depreciation and Section 179 Expensing, we would not have invested the $13 million we have in 2014 on new equipment," said Smith, whose automotive supply company employs over 300 workers.
Smith reminded the Washington audience that manufacturers large and small all across the country plan their investments years in advance. "We just spent $10 million on a new set of machines, but that equipment takes over two years to place into service," Smith said. "How can I plan and finance a two-year, $10 million project when I don't even know what Congress will do two months from now? We can't just purchase a machine on December 31st by midnight based on a vote Congress took that day. " The Senate is slated to take up the matter shortly and the one-year extension is widely expected to pass there as well.
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Annual Salary Survey
Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.
There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.
But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.
Read more: 2015 Salary Survey