New tax increases proposed by President Joe Biden would kill one million jobs and harm the economy, a new study released by the nation’s largest manufacturing association states.
For manufacturers, the tax reform of 2017 was like “rocket fuel” and if the new administration rolls back those reforms, “manufacturing workers will lose out on jobs, growth, and raises,” according to Jay Timmons, president and CEO of the National Association of Manufacturers (NAM).
“After decades of advocating for a tax system that provided competitive rates and modern international tax provisions, manufacturers in America kept our promises following the enactment of the 2017 tax reforms: we raised wages and benefits, we hired more American workers, and we invested in our communities,” Timmons said in a press release.
“If we undo those reforms, all of that will be put at significant risk.”
As a result of the tax cuts, U.S. manufacturers added 263,000 new jobs in 2018, according to the NAM, which was the best year for job creation in more than two decades.
The study conducted by Rice University economists John W. Diamond and George R. Zodrow for the NAM examined the short- and long-term impacts of Biden’s tax plan.
The study states that the proposed changes, including the increased corporate tax rate would cause one million job losses in the first two years. The average annual job losses would be 600,000 each year over 10 years and real wages would fall by 0.6 percent in the long run, according to the study.
The implementation of these changes would also reduce gross domestic product by $117 billion and investment in equipment and structures by $80 billion in 2023, the study says.
Diamond and Zodrow’s study analyzes the impact of undoing the tax cuts enacted in 2017 under the Tax Cuts and Jobs Act. The changes in the analysis included increasing the corporate tax rate to 28 percent, restoring the corporate Alternative Minimum Tax, removing expensing (100 percent bonus depreciation) of most investments in depreciable assets, and repealing the 20 percent deduction for certain pass-through business income immediately. – READ MORE
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