The U.S. has the world’s second highest
tax rate on business earnings.
It's a big reason why we've lost a third of our manufacturing jobs since 1999.
Healthy, growing economies make things – not just sell them. Products can be in new technologies such as software or integrated circuits, or in mature industries like autos or tires. Regardless of the goods produced, a country with a growing manufacturing base typically has a rising standard of living.
What makes the manufacturing sector so crucial? For starters, as President Obama’s own top economic advisor has acknowledged, there is “a strong association between equipment investment and growth” and it is “much stronger” than any other factor.*
Also, manufacturers represent more than 90 percent of private-sector research and development in America. While they’re busy making today’s products, they’re also always searching for ways to improve and for new products to produce.
Last, but hardly least: manufacturing firms typically pay their employees well and routinely invest in them with continuous career development.
In short, if you want a growing economy, you need more manufacturing. The U.S. has lost almost 6 million manufacturing jobs since 1999. With such a drastic decline in our manufacturing base, we must act now to reverse the slide. To start, we have to find a way to generate more private investment in new plant and equipment. That’s where Pete Sessions’ plan begins.
Pete Sessions’ Plan: Reduce taxes on business earnings and investments.
Bring back manufacturing jobs by cutting taxes on the firms that create them.
The federal tax code punishes investments in new plant and equipment. The nearly 6 million Americans who have lost their manufacturing jobs since 1999 are casualties of this continued assault on manufacturers and their payrolls.
We must lower taxes on business earnings to give companies the incentive to invest here in the U.S.
Pete Sessions is a co-sponsor of a bill to lower the tax rate on business earnings to 25 percent, but he’ll be the first to suggest we may need to go further. He puts it this way: “Why not drop the tax rate on business earnings to a level equivalent with Hong Kong and Singapore – around 17 percent? This may be the game-changing event necessary to create millions of manufacturing jobs as quickly as possible.”
Pete Sessions is also author of the EXPENSE Act, a proposal he first introduced in 2005. This bill would change permanently Section 179 of the tax code, which governs how businesses deduct capital expenditures from their earnings. “Our laws dealing with depreciation were written in a different era,” Pete explains. “This part of our tax law harms employers – especially small businesses – as they buy new assets, particularly new technologies.”
The combination of these two proposals offered by Pete Sessions will kick-start our economy, providing significant incentives to businesses and manufacturers to reinvest and begin creating new jobs in America.
* “Equipment Investment and Economic Growth” by J. Bradford de Long and Lawrence H. Summers, both of Harvard University, published by National Bureau of Economic Research; August, 1995.
