Manufacturers tout benefits of Trump’s proposed tax plan

The head of the nation’s largest trade group representing manufacturers was in Milwaukee on Wednesday to talk about President Donald Trump’s proposed tax plan.

Jay Timmons, president and CEO of the National Association of Manufacturers, was here for a NAM Executive Insight Series panel discussion where tax reform was the main topic.

The panelists included Nick Pinchuk, chairman and CEO of Snap-On Inc.; Chris Mapes, chairman, president and CEO of Lincoln Electric; Tom Riordan, president and CEO of Neenah Enterprises; and Mark Schwabero, chairman and CEO of Brunswick Corp.

Trump and congressional Republicans recently unveiled the broad outlines of a nearly $6 trillion tax plan that would deeply reduce taxes for corporations, simplify tax brackets and nearly double the standard deduction used by most tax filers. But many details still need to be worked out.

One provision of the plan would allow businesses for the next five years to write off the full cost of new equipment in the year it’s purchased. Trump said that proposal alone would encourage companies to invest and create jobs.

Corporations could also see their top tax rate cut to 20% from 35%. Trump said a 20% corporate rate would be the lowest top marginal income tax rate for small and medium-sized businesses in more than 80 years.

Critics say the plan would raise the federal deficit by slashing corporate tax rates and eliminating some taxes paid by the wealthy.

Taxpayers in the highest 1% of incomes, making more than $730,000 annually, for example, would receive about half of the total tax benefit from Trump’s proposed overhaul, according to the Tax Policy Center, a Washington-based nonprofit.

However, the tax code desperately needs an overhaul, Timmons said in an interview.

“I am really optimistic about getting tax reform yet this year. There’s a focus in Washington like I have not seen on any issue for many, many years,” he said.

It’s been more than 30 years since the last major tax code overhaul, according to Timmons.

“The price that we’re paying right now is a very noncompetitive, stagnant economy because of a very outdated tax code. … We’re in a crisis right now involving economic growth,” he said.

“As we have stayed the same for 30 years, other countries have figured out how to take away our economic advantage,” he added. “They are lowering their tax rates. Ireland is at 12.5%, Canada is at 15%.”

A majority of manufacturers who answered a recent National Association of Manufacturers survey said pro-growth tax reform would make them more likely to expand their business, hire workers and increase employee wages and benefits.