Senate Rejects Tax Increases
Last night, the Senate rejected efforts to begin debate on the “American Jobs Act” (S. 1660), which includes a so-called “millionaires surtax,” a new permanent tax on taxpayers with income over $1 million, including many small manufacturers.
In the lead up to the vote, NAM Senior Vice President for Policy and Government Relations Aric Newhouse sent a letter to the Senate expressing Manufacturers’ opposition to the surtax, which would amount to over $450 billion in new taxes. Newhouse noted that Manufacturers are particularly concerned that the proposal would impose an anti-growth surtax on top of an already out of date tax code:
“Now, more than ever, is the time for tax reform to promote, jobs, growth, jobs and competitiveness that will make the United States the best country in the world to manufacture products.” He added that such a significant change to our nation’s tax policy – especially one which would raise nearly a half of a trillion dollars – “should not be considered as a rifle-shot effort to address a specific need for revenue.”
Moreover, this surtax could not come at a worse time for the almost 70 percent of manufacturers that pay taxes at individual rates. As pointed out by Sen. Marco Rubio (FL) in a statement on the bill “if the 2001 tax relief expires as scheduled in 2013, this new tax surcharge would push the top marginal tax rate to nearly 50 percent when accounting for the new 3.8% Medicare tax on unearned income in the Patient Protection and Affordable Care Act. It would also sharply increase taxes on capital gains and dividends investment, hurting small businesses and investors.”
Manufacturers are again calling upon Congress to undertake a comprehensive review of our nation’s tax laws and reform both individual and corporate tax code with the ultimate goal of creating a tax code that is both pro-growth and pro-job creation.
Carolyn Lee is senior director of tax policy, National Association of Manufacturers.