Just hours after President Obama released his 2014 budget, the National Association of Manufacturers decried the administration’s proposed $580 billion revenue increase. Yet two of the administration’s budget and tax policies will actually help the manufacturing sector, said Dorothy Coleman, the association’s vice president of tax and domestic economic policy, in an interview.
She applauded the budget's support for permanent and strengthened research and development incentives. The Obama administration is offering $4.5 billion in incentives for manufacturing, research, clean energy and insourcing and creating jobs, according to its budget. Coleman agrees with the need for federal R&D support but believes the White House could do still more.
Coleman said the NAM also supports a strong capital cost recovery system -– a tool that would allow companies to expense capital equipment in the tax year purchased. While no line item is listed in the administration’s proposal, President Obama is moving toward enhancing the capital cost recovery system, she said.
Despite support for these two measures, the National Association of Manufacturers opposes the large majority of President Obama’s budgetary policy.
The president plans to generate $580 billion in revenue through “loophole closers.” The association, however, takes issue with Obama’s nomenclature.
“Closing loopholes isn’t a correct assessment,” said Matthew Lavoie, senior director for media relations. “Loophole has the connotation of dodging.”
Instead, the association views the "loopholes" as long-standing tax policy, Coleman said.
Two-thirds of manufacturers are taxed as individuals, according to Coleman. Thus, the association decries popular policies such as the “Buffet tax” – a 30 percent minimum tax rate on household income above $1 million – and limits on tax deductions, both of which are in the president’s budget.
Coleman criticizes the administration’s billions in tax increases on multinational companies and energy companies as inhibitors to job and industry growth.
Colin Milligan, communications director for Rep. Cheri Bustos, an Illinois Democrat, believes the association is playing politics, he said in an e-mail. Milligan considers the trade organization to be Republican-leaning, so he's not surprised by its opposition.
Coleman stated that the National Association of Manufacturers advocates comprehensive tax reform and has yet to fully support a budget proposal or tax overhauls.