Jay Timmons, president and CEO of the National Association of Manufacturers, used his annual address on the state of the industry to warn against returning to “archaic” tax policies and enacting pro-union legislation championed by Democrats.
Mr. Timmons touted the progress the manufacturing industry has made during the coronavirus pandemic and endorsed putting new money into infrastructure projects such as roads, electric grids and high-speed internet.
He called for a focus on “tomorrow” and not “yesterday.”
“It means investing boldly in the infrastructure of the future, without going back to the archaic tax policies of the past,” Mr. Timmons said in his 2021 “State of Manufacturing” address. “America can lead the world in modern infrastructure…and, at the same time, we can keep a tax code that allows us to continue creating manufacturing jobs right here - right here in America.”
He warned against federal legislation that would impose a “card check,” where employees petition an employer to form a union by getting a majority of workers to sign authorization cards.
Critics say the move curbs the use of secret ballots for union elections and that House-passed legislation, dubbed the PRO Act, makes it too easy for workers to do an end-around by alleging employer interference to the National Labor Relations Board.
Mr. Timmons’ group released a new study on Friday that found an increase in the corporate tax rate from 21% to 25%, combined with other corporate and individual income tax hikes, would kill 1 million jobs within two years.
“Tax increases, even well-intentioned tax increases, would be a giant, destructive step backwards,” Mr. Timmons told reporters after his address.
He said manufacturers hired more workers after the passage of the 2017 tax law, which cut the U.S. corporate tax rate from 35% to 21% and slashed individual income tax rates across the board.
“We raised wages and benefits and we invested in our communities,” he said. “In fact, 2018 was the best year for manufacturing job creation in more than two decades.”
President Biden wants to finance his $4 trillion-plus domestic spending agenda by increasing the U.S. corporate tax rate from 21% to 28% and hiking individual income tax rates on upper-income taxpayers and investors.
Mr. Timmons said manufacturers “strongly support” investments in infrastructure — even some projects like high-speed internet that stretch the bounds of traditional infrastructure.
He said other sources of revenue, like a miles-driven fee, public-private partnerships, and bonding, are preferable to tinkering with the 2017 tax law.
“I think there are a number of ways to pay for infrastructure investment without hobbling manufacturers with archaic tax policies that would really set us back in terms of investment [and] job creation,” Mr. Timmons said.
The White House has touted a recent survey of more than 1,000 small business owners that found two-thirds of them support increasing taxes on corporations to pay for Mr. Biden’s $2.3 trillion infrastructure plan.
“Small-business owners know that raising taxes on wealthy corporations to pay their fair share isn’t just the right thing to do — it’s also good for growing our economy from the bottom up and the middle out,” said Isabel Guzman, administrator of the Small Business Administration.
Ms. Guzman was speaking at an event hosted by Small Business for America’s Future, the group that released the poll.
The president has been cool on “user fees” to pay for his spending plans, saying the middle class will likely bear the brunt of them.
Mr. Biden has indicated he’s open to compromise on the corporate rate. Some Democrats, including Sen. Joe Manchin III of West Virginia, have talked up a 25% rate.
The White House has said studies that are more bearish on the stimulative effects of the president’s economic agenda don’t properly factor in the positive economic effects of provisions like child care and free community college.