One Voice | Government Advocacy for the Metalworking Industry

Message to Congress - We need tax reform for all manufacturers – C-Corporation and Pass-through businesses. The only way to grow the economy is through a simplified code that encourages domestic investment with a globally competitive rate.

The U.S. continues to have the highest business tax rate in the developed world, a rate which is 15% higher than in China and 10% more than our nine largest trading partners combined. American manufacturers need a globally competitive tax code that treats all businesses equally, whether a C-Corporation or pass-through entity such as an S-Corporation, LLC, or ESOP.

A recent survey showed that 75% of One Voice members are pass-throughs paying at the individual rate. Nationwide, these types of businesses account for 54% of all jobs in the United States and 81% of all manufacturers. This means 8 in 10 manufacturing businesses pay taxes at the individual rate, the total of which reaches 44% for many. Tax reform only for C-Corporations, leaves virtually all small businesses behind to pay the much higher rate. 

Any attempts to lower the rate for C-Corps should also include a reduction for business income by pass-throughs as well. Smaller, family-owned companies in particular are structured as S-Corps due to the need to pass the business down to the next generation without incurring severe tax penalties. Clearly, a rate reduction for C-Corps will help all industries as many larger corporations are suppliers and customers for pass-throughs; but to truly grow the economy, we need to improve the global competiveness of all manufacturers. 

Congress should also build upon its important work in December 2015 making permanent the R&D Tax Credit and Section 179 Equipment Expensing, while extending Bonus Depreciation through 2019. For the first time in decades, Congress gave manufacturers the stability they need in the tax code to plan capital expenditures. Next, Congress should act on comprehensive tax reform and enhance the R&D to 20%, continue to grow 179, and make permanent a large equipment recovery provision such as Bonus Depreciation. 

To improve their global competitiveness and increase production and job creation, One Voice manufacturers report using the following:

• Section 179 Expensing 
• Bonus Depreciation 
• R&D Tax Credit 
• Section 199 Domestic Production Activity Deduction 
• Last-in-First-Out, LIFO 
• IC-DISC when exporting 

For More info on Tax Reform from One Voice:

• One Voice One-Pager on Tax Reform
• House Death Tax Repeal Act Coalition Support Letter
  
• Senate Death Tax Repeal Act Coalition Support Letter
• December 2018 Tax Policy Update
• One Voice Comments to the Senate Finance Committee on Tax Reform Discussion Draft
• Senate Tax Extenders Coalition Letter
• Coalition IC-DISC Letter to the Senate Finance Committee
• One Voice Comments to the House Ways & Means Committee Manufacturing and Small Business/Pass Throughs Working Groups on Tax Reform
• Testimony Before the House Small Business Committee on Tax Reform – April 2013
• Coalition Letter on Estate Tax to Congressional Leadership
• Coalition Estate Tax Add in Roll Call
• Tax Policy Template
• House Republican Freshman Tax Extender Letter - Sept. 2012
• One Voice testimony to House of Representatives Ways and Means Committee on impact of tax reform on manufacturers
• One Voice formal comments to Senate Finance Committee on Expired and Expiring Tax Credits and Deductions
• Coalition Letter on Estate Tax
• Coalition Letter on Bonus Depreciation
• Coalition Comments to House Ways and Means Committee on R&D Tax Credit