By Bruce McFee Chairman and CEO of Sullivan-Palatek, Inc.
The comprehensive tax reform legislation passed this month by Congress isn’t just an historic achievement for elected leaders – it’s a monumental accomplishment for the equipment manufacturing industry as well.
AEM’s membership includes a diverse group of members – ranging from multinational corporations to privately-held businesses to foreign-owned companies. Some firms are large, while others are small. Our association brings us together as manufacturers, and tax reform is a uniting force for our industry because it will touch virtually every AEM member company and our entire industry footprint in a positive way.
The tax bill has numerous provisions that might benefit companies in different ways. The most important reforms, which lower tax rates for both conventional manufacturing businesses as well as “pass-through” entities, will make all U.S. equipment manufacturers more competitive on an international basis. These are welcome improvements to the U.S. business environment that will enable more investment in manufacturing workers and facilities.
There are a slew of additional reforms that will additionally benefit our industry. The tax bill will encourage investments in new equipment by allowing for immediate expensing of capital investment. And for many family-owned businesses, the cost of passing a business to the next generation is reduced though a doubling of the estate tax exemption.
These major changes to our tax system are significant for equipment manufacturers, which is why AEM has been at the vanguard of this fight for well over a year.
AEM has fought for tax reform in repeated meetings with members of Congress, both on Capitol Hill and at manufacturing facilities across the country as part of the 2017 I Make America tour. Many of my industry colleagues also made the case for tax reform at this year’s I Make America Fly-In in September. (Looking back on the timing of that gathering, it offered the perfect opportunity for our industry to make our case for tax reform.)
We also supported tax reform by taking the time to gauge our industry’s perceptions of the issue, and speak with credibility about equipment manufacturers’ needs in the media. AEM’s “Behind Every Product” video ad in December helped make the final push for tax reform by engaging tens of thousands of stakeholders in our nation’s capital this month.
If nothing else, the tax reform effort shows how the right political crosswinds – combined with a whole lot of industry action and enthusiasm – can help to advance pro-manufacturing policy goals. I know that is a formula that AEM hopes to replicate in 2018 on issues like infrastructure investment, a strong agricultural economy, and free trade.
Bruce McFee is chairman and CEO of Sullivan-Paletek, an AEM member and a manufacturer of electric and portable rotary screw air compressors. McFee also serves as chair of AEM's tax policy working group.
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