Tax-Reform Bill Introduced

April 1, 2014
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 C-corporation or Pass-through chart
*Data based on responses from 130 One Voice manufacturers surveyed in January 2014.
House s and Means Committee Chairman Dave Camp recently introduced his long-awaited tax-reform bill that updates outdated provisions, adds clarity and creates a more stable framework to the tax code over the long term. Prolonged uncertainty over the federal tax code is one of the challenges facing U.S. manufacturers, and PMA and other manufacturing groups are endorsing Chairman Camp’s efforts. Several provisions in the bill mark a significant victory for PMA and its One Voice advocacy partnership.

Key provisions of the bill include a 25-percent tax rate for all manufacturers, regardless of whether the business is structured as a C-Corporation or a pass-through; and permanent extension of the R&D Tax Credit. It also makes permanent Section 179 Expensing—a top priority for manufacturers—at a limit of $250,000.

As expected, the proposal repeals bonus depreciation, transitions LIFO and gradually phases out the Section 199 Domestic Production Activity Deduction. Many manufacturers use these provisions and PMA is working with Congress on steps to reduce the impact that these changes would have on small businesses.

Should Chairman Camp’s proposal become law, small and medium-sized manufacturers will become more globally competitive.

“An overhaul of our tax code is long overdue and Chairman Camp deserves credit for having the leadership and courage to take on this important issue,” says PMA President Bill Gaskin. “This is more than just about lowering rates—it is about simplifying the code, making it globally competitive and creating certainty around provisions important for small businesses seeking to invest in the future of their companies.”

Tax reform will be a key issue manufacturers will discuss with members of Congress during the 2014 PMA/NTMA One Voice Legislative Conference, May 6-7 in Washington, D.C. Help bring common-sense solutions to Washington by joining industry peers at this event.

 

See also: Precision Metalforming Association

Technologies: Management

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