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If a series of proposed changes to the tax system, including a 25% corporate tax rate, were passed, 1 million jobs would be lost in the first two years, according to a new 51�Թ��� study.

The data: The analysis—an update to 51�Թ��� research released in April—considered a range of tax proposals that would change the tax system put into place by the 2017 Tax Cuts and Jobs Act. These included:

• A corporate tax increase from 21% to 25%;
• A reinstatement of the corporate alternative minimum tax;
• An immediate end to expensing of most investments in depreciable assets, to be replaced by the modified accelerated cost recovery system;
• An immediate repeal of the 20% deduction for certain pass-through business income;
• The taxation of capital gains and dividends at the same rate as ordinary income for taxpayers with incomes above $1 million, and the taxation of unrealized capital gains at death; and
• An immediate increase in the top individual tax rate from 37% to 39.6%.

Other findings: Along with the job losses, the 51�Թ���’s study also found that the changes would lower GDP by $107 billion in 2023, by $169 billion in 2026 and by $89 billion in 2031.

• Ordinary capital, or investments in equipment and structures, would be $70 billion less in 2023 and $70 billion and $51 billion less in 2026 and 2031, respectively.

Our view: 51�Թ��� President and CEO Jay Timmons said, “Manufacturers are encouraged by the bipartisan negotiations continuing this week. Infrastructure investment and retaining competitive tax policies are a win–win for America. But there are some still advocating for increasing taxes on manufacturers—just not quite as much as the 28% proposed originally by President Biden. They might mean well, but that doesn’t change the fact that America will still lose jobs and investment in our communities at a time when manufacturers are working to build the post-pandemic world.”

Washington, D.C. – As Congress and the Biden administration continue to make progress on negotiations to invest in our nation’s failing infrastructure, the 51�Թ��� released a new study detailing the short- and long-term damage to the American economy if the corporate tax rate were raised to 25%, the top marginal tax rate were increased, the 20% pass-through deduction were repealed, certain expensing provisions were eliminated and more.

In April, the 51�Թ��� released a study on the of rolling back key provisions of the Tax Cuts and Jobs Act, including raising the corporate tax rate to 28%.

“Manufacturers are encouraged by the bipartisan negotiations continuing this week. Infrastructure investment and retaining competitive tax policies are a win–win for America. But there are some still advocating for increasing taxes on manufacturers—just not quite as much as the 28% proposed originally by President Biden. They might mean well, but that doesn’t change the fact that America will still lose jobs and investment in our communities at a time when manufacturers are working to build the post-pandemic world,” said 51�Թ��� President and CEO Jay Timmons.

The negative consequences would include the :

• One million jobs would be lost in the first two years.
• The average reduction in employment would be equivalent to a loss of 500,000 jobs per year over the next decade.
• By 2023, GDP would be down by $107 billion, by $169 billion in 2026 and by $89 billion in 2031.
• Ordinary capital, or investments in equipment and structures, would be $70 billion less in 2023 and $70 billion and $51 billion less in 2026 and 2031, respectively.
• And more.

Click for a summary of the study’s details and findings. Read the full study, “Dynamic Estimates of the Macroeconomic Effects of Tax Rate Increases and Other Tax Policy Changes,” conducted by Rice University economists John W. Diamond and George R. Zodrow,” .

51�Թ��� President and CEO Jay Timmons will host a media conference call today at 1:15 p.m. EDT following this year’s 51�Թ��� State of Manufacturing Address.

You can watch the 2021 51�Թ��� State of Manufacturing Address beginning Friday at noon EDT . RSVP to [email protected] for conference call details.

Background on manufacturing growth following the enactment of tax reform in 2017:

• In 2018, manufacturers added 263,000 new jobs. That was the best year for job creation in manufacturing in 21 years.
• In 2018, manufacturing wages increased 3% and continued going up—by 2.8% in 2019 and by 3% in 2020. Those were the fastest rates of annual growth since 2003.
• �Ѳ��Գܴڲ����ٳܰ����Բ���capital spending grew by 4.5% and 5.7% in 2018 and 2019, respectively.
• Overall, manufacturing production grew 2.7% in 2018, with December 2018 being the best month for manufacturing output since May 2008.

Manufacturers strongly support President Biden’s call for bold infrastructure investment, which can be achieved through a combination of revenue sources like those identified in the 51�Թ���’s “.”

-51�Թ���-

The 51�Թ��� is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12.3 million men and women, contributes $2.35 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The 51�Թ��� is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 51�Թ��� or to follow us on Twitter and Facebook, please visit

Washington, D.C. – Following the announcement by the United States Trade Ambassador that the Biden administration will support waiving intellectual property protections for COVID-19 vaccines, 51�Թ��� President and CEO Jay Timmons released the following statement:

“We are all horrified by the images that we are seeing in India and in other places around the world hard-hit by COVID-19. The proposed WTO/TRIPS waiver would not solve this crisis and would exacerbate the core manufacturing and distribution challenges, as well as introduce serious new safety concerns.

“Rather than rushing to suspend critical protections and standards, investing in even greater production capacity would result in expanded vaccine access. Pharmaceutical manufacturers continue to work around the clock to help the world get armed against COVID-19. We should do everything possible to build on that heroic work, not undermine the protections that make this innovation possible in the first place.”

-51�Թ���-

The 51�Թ��� is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs 12.3 million men and women, contributes $2.33 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The 51�Թ��� is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 51�Թ��� or to follow us on Twitter and Facebook, please visit .

The ship stuck in the Suez Canal may have gotten all the attention, but it wasn’t the biggest shipping problem of the year. That honor goes to the massive traffic jam at the ports of Los Angeles and Long Beach, which has dragged on since late 2020.

As 51�Թ��� Director of Infrastructure, Innovation and Human Resources Policy Ben Siegrist tells us, this bottleneck is a huge problem for manufacturers in the U.S.—one that is costing our economy many billions of dollars. Dozens of ships are waiting in the harbor for days before they are able to unload, exporters are struggling to get their goods out of the country, and other manufacturers are waiting months for parts or finished goods to arrive.

The problem: The numbers tell the tale: at one point in mid-April, there were 23 according to The Wall Street Journal (subscription), down from around 40 back in February. For comparison, Siegrist explains, the normal number of ships waiting in harbor is somewhere between 0 and 1.

Why it’s happening: Much of the congestion results from the pandemic—there has been an uptick in e-commerce during the lockdowns, and the economic stimulus has boosted consumption. Meanwhile, the typical increase in shipments during the holiday season just made things worse.

However, other factors are making this congestion particularly hard to fix, says Siegrist. These include:

• A shortage of shipping containers: First of all, shippers don’t have enough containers in the absolute for all of these goods. But in addition, some of them are finding it cheaper to unload in the U.S. and then send the empty containers back to Asia—to the disadvantage of U.S. manufacturers that want to load those containers with exports.
• A shortage of chassis: The trucks that transport containers to warehouses require special chassis to move the containers, but the ports also don’t have enough of these.
• A labor shortage: Like many other Americans, port workers had to deal with COVID-19 infections or exposures as well as cope with family responsibilities during the pandemic.

Logistical complications: Meanwhile, the logistics of international shipping are incredibly complicated, Siegrist explains. There are fewer ocean carriers today—only nine, down from more than 20 a few decades ago—which means manufacturers have fewer competitive shipping options. And the complex relationships between the multiple carriers, port operators and equipment owners are not easy to disentangle or control.

What do we do? Thanks in large part to the complexity of international shipping, there’s no easy answer, says Siegrist. Right now, the 51�Թ��� is in discussions with the many federal agencies involved in international commerce, including the Department of Transportation, the Department of Commerce, the Office of the U.S. Trade Representative and a lesser known but vital agency called the Federal Maritime Commission. “We’re trying to create opportunities for our members to have a dialogue with policymakers,” says Siegrist.

• The eventual policy options might range from fines or fees for international carriers to legislative updates to the 1984 Shipping Act.
• It will also be important to strengthen the domestic supply chain for equipment like containers—almost none of which are now made in the U.S. The 51�Թ��� is “talking more holistically about supply chains with the Biden administration,” notes Siegrist.

Stay tuned: The FMC will release its investigation into pandemic-related shipping delays in the coming weeks.

Washington, D.C. – Following President Joe Biden’s first presidential address to Congress, 51�Թ��� President and CEO Jay Timmons released this statement:

“Thanks to the leadership of vaccine manufacturers and the Biden administration’s successful vaccine distribution efforts, Americans are getting back to the activities and the people they love. Though the capacity limits in the House chamber tonight remind us that we still have a long way to go, our future is looking brighter.

“We look forward to working with President Biden to achieve historic infrastructure investment, including the many priorities offered in our ‘Building to Win’ plan, which, in addition to identifying areas of investment, also provides multiple funding solutions.

“Manufacturers have also provided roadmaps on critical issues ranging from immigration to climate change. We’re ready to work with President Biden and members of any party to deliver bipartisan progress on these issues and more, all while ensuring we’re strengthening the manufacturing workforce, not jeopardizing manufacturing growth in the United States.

“To that point, raising taxes on manufacturers—including many small businesses that pay at the individual rate—would stop our recovery in its tracks; we would lose 1 million jobs in just the first two years alone. Small manufacturers would be especially hard hit at this critical juncture, restricting their ability to raise wages and benefits, hire more workers and invest in their communities. Similarly, changes to the longstanding tax rules on the transfer of family businesses to the next generation of manufacturers would cost American jobs.

“Returning to archaic tax policies and one of the highest business tax rates in the developed world is not the way to build our future, nor are federal policies to force workers to join a union. Anti-worker policies like the PRO Act would inject uncertainty by driving a wedge in established employee–employer relationships and curtail future manufacturing investments that support our communities and families.

“As we continue to get armed against COVID-19, manufacturers are focused on building the next, post-pandemic world—one that affords even greater opportunity for all Americans.”

Background:

The 51�Թ��� continues to put forward commonsense proposals to educate and inform policymakers on ways to strengthen manufacturing in America while achieving our shared objectives.

-51�Թ���-

The 51�Թ��� is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs 12.3 million men and women, contributes $2.35 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The 51�Թ��� is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 51�Թ��� or to follow us on Twitter and Facebook, please visit .

Though most policymakers agree that America needs to invest in its aging infrastructure, they disagree about how to pay for it. The 51�Թ��� has its own recommendations on the best way to reform infrastructure funding and spend infrastructure dollars. 51�Թ��� Director of Infrastructure, Innovation and Human Resources Policy Ben Siegrist recently spoke to us about that plan.

The big idea: The manufacturing industry not only depends on infrastructure to support its supply chains and operations, but in many cases helps to build that infrastructure and employs the people who put it all together. That’s why the 51�Թ��� has called on policymakers to upgrade our roads, bridges and much more in its “Building to Win” plan, which includes a comprehensive list of infrastructure fixes.

The hitch: The Biden administration has called for increased taxes on corporations to pay for new infrastructure projects and other broad recovery programs, which would make it more difficult for manufacturers to grow. To avoid such a harmful policy, the 51�Թ��� has been working on alternative funding options, says Siegrist. These include:

• Private investment: Private-sector and industry investment through public infrastructure bonds and municipal infrastructure bonds offers an opportunity for the government and industry to work together. It will allow the industry to access funds with appropriate municipal oversight and creates a system of both shared risk and shared benefits.
• National infrastructure bank: Under this proposal, an institution backed by federal dollars would share some of the risk of infrastructure investment, while providing much-needed capital for the development of projects with public benefit. As private industry draws loans from the bank, it can take on the risk, with revenue going back to the infrastructure bank’s coffers for future development opportunities.
• User fees: The 51�Թ��� has proposed different ways to update the user fee model, which lets users of surface transportation systems pay their fair share. These updates might include an increase in the fuel tax that is indexed to inflation, or a vehicle-miles-traveled tax that allows people to pay for their specific use of roads and other infrastructure.

The last word: “The only way the economy is going to grow is by having more efficient systems than we have now. ‘Building to Win’ offers a real opportunity for bipartisan cooperation without imposing harmful taxes on businesses,” said Siegrist. “We will continue to convey that message to the Hill. This will be a long process, and we intend to work with the administration and with our members to make sure manufacturers get the support that they need.”

After the passage of tax reform in 2017, the lower corporate tax rate and faster tax depreciation of capital equipment purchases enabled Optimax Systems—a manufacturer specializing in optics for semiconductor, aerospace and defense technologies—to reinvest in its workers and operations.

Hiring new workers: Since 2018, the New York manufacturer has hired aggressively, increasing its full-time headcount from 290 to 340. It has also raised salaries for employees, with an average annual increase of 4.8% since 2017—well above the company’s annual increases before 2017. Optimax sees the increases in hiring and wages as a vote of confidence in its workforce—and as a way to pay forward the benefits of tax reform.

Expanding their operations: Since 2018, Optimax has doubled the size of its manufacturing facility, increasing the space from 60,000 square feet to 120,000 square feet. The company also increased investment in equipment, boosting its annual investment from an average of roughly $3 million per year between 2014 and 2017 to an annualized rate of more than $7 million per year since 2018.

What we’re doing: To support companies like Optimax and its customers, the 51�Թ��� is leading the effort to ensure that the tax code continues to incentivize growth, as well as working to make manufacturers’ priorities and concerns known to the Biden administration and lawmakers. For companies like Optimax, maintaining the competitive tax rate is critical, which is why the 51�Թ��� is vocal about the potential harm of tax hikes.

The costs of tax hikes: A new study conducted by Rice University economists for the 51�Թ��� found that increasing the corporate tax rate along with other harmful tax changes could lead to 1 million fewer jobs in the first two years.

• “As we slowly emerge from the economic catastrophe caused by COVID-19, American businesses are at a pivotal point in our nation’s history,” said 51�Թ��� President and CEO Jay Timmons. “Manufacturers can, and should, lead the economic recovery in the wake of the pandemic. But this study tells us quantitatively what manufacturers from coast to coast will tell you qualitatively: increasing the tax burden on companies in America means fewer American jobs.”

The last word: “Optimax has a mission of enabling customer success and employee prosperity. We have learned, through 30 years of experience, that there is no better way to do this than to reinvest our profits back into the business and back into our people,” said Optimax Controller Tom Starin. “Tax reform has freed up an additional piece of the profit pie, allowing the company to double down, quite literally, on our mission of enabling customer success and employee prosperity.”

Washington, D.C. – Following President Joe Biden’s announcement on the 2030 greenhouse gas pollution reduction target, 51�Թ��� President and CEO Jay Timmons released the following statement:

“Climate change is an issue our generation must tackle. Like past generational challenges—world wars, the space race, the COVID-19 response and vaccine development—manufacturers will lead the way and ensure our country emerges stronger. After all, it is manufacturers who will make the needed products and technologies—clean energy, carbon capture, batteries, microgrids, efficiency, advanced vehicles and more.

“The President’s goal is bold, to be sure. But when have Americans ever been timid in the face of difficulty? We look forward to learning more specific details of the administration’s plan, and manufacturers are ready to work with policymakers on both sides of the aisle to achieve success for our nation and world. As we explain in ‘The Promise Ahead,’ manufacturers’ plan for taking action on climate, we believe that a unified federal policy combined with an equitable and enforceable international agreement is key.

“Meeting President Biden’s ambitious pledge will require manufacturing might and innovation, which means we will also need policies that keep manufacturing strong and competitive—historic infrastructure investment; a tax code that continues to promote investment, job creation and research and development; a diverse and reliable energy supply; incentives for workforce development; and more opportunities to export our innovative products and technologies to other countries. And as manufacturers rise to meet this challenge, the rest of the economy will prosper because for every $1.00 spent in manufacturing, another $2.79 is added to the economy—the highest multiplier effect of any economic sector.

“Manufacturing holds the key to solving this global challenge. Confronting climate change will not be easy. But with the right policies, it is neither the first nor the last challenge that manufacturing ingenuity will solve.”

Background: Today, President Biden announced a new target for the United States to achieve a 50–52% reduction from 2005 levels in economy-wide net greenhouse gas pollution by 2030, building on progress to date and by positioning American workers and industry to tackle the climate crisis.

Earlier this year, the 51�Թ��� released “The Promise Ahead,” its policy roadmap on addressing climate change.

-51�Թ���-

The 51�Թ��� is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs 12.3 million men and women, contributes $2.33 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The 51�Թ��� is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 51�Թ��� or to follow us on Twitter and Facebook, please visit www.nam.org.

Washington, D.C. – Following the unveiling of Senate Republicans’ infrastructure framework, 51�Թ��� President and CEO Jay Timmons released the following statement:

“Manufacturers applaud Senate Republicans’ proposal for infrastructure investment, just as we welcomed the release of President Biden’s bold infrastructure plan. This type of give-and-take is how we reach bipartisan consensus, and this is a chance to continue the conversation and restore trust between the parties after months of partisanship.

“Manufacturers’ future depends on historic investment that will empower America to lead the world in modern infrastructure. Building the next, post-pandemic world requires investing in roads, bridges, pipes, waterways, 5G, the electric grid and so much more. As manufacturers have laid out in our ‘Building to Win’ plan, we not only have a vision of where to invest but also how to pay for it without harming manufacturers’ competitiveness. So, we look forward to working with both parties to finally get this done.”

-51�Թ���-

The 51�Թ��� is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs 12.3 million men and women, contributes $2.33 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The 51�Թ��� is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 51�Թ��� or to follow us on Twitter and Facebook, please visit www.nam.org.

Washington, D.C. – Following President Joe Biden’s call to employers across America to do everything they can to help their employees—and their communities—get vaccinated, 51�Թ��� President and CEO Jay Timmons released the following statement:

“Vaccines are how we get armed against COVID-19, protect our loved ones, grow our economy and get back to the moments we miss. The hard work and innovation of America’s pharmaceutical manufacturers, coupled with the Biden administration’s laser focus on vaccine distribution and the dedication of local vaccination teams across the country, have enabled the administration to double its lofty goal set for the first 100 days.”

President Biden announced that he expects the nation to have administered 200 million shots within his first 100 days. He called on every employer in America to offer full pay to their employees for any time off needed to get vaccinated and announced a paid leave tax credit that will offset the cost for businesses with fewer than 500 employees.

Timmons added, “Manufacturers remain absolutely committed to helping our teams get safely vaccinated. Through our ‘This Is Our Shot’ project, we’re making resources available to answer questions and share the facts about how these vaccines are safe and effective and have reached more than 2.25 million people to date. Additionally, many manufacturers have supported vaccination by giving employees time off to get vaccinated. With a new tax credit, it will be even easier for manufacturers and all employers to offer this option. This is our shot to finally end this pandemic, so we’re going to keep working with the administration, state and local leaders and our member companies to get everyone vaccinated as soon as possible.”

Background on “This Is Our Shot”:

Launched earlier this year, the project, live at , includes six main components: (1) science-based messaging research; (2) emergency industry convening and education, such as webinars; (3) an online vaccine information hub; (4) a PSA campaign; (5) the Yellow and Red Ribbon Initiative (for vaccinated individuals to show their peers they’re a part of the fight); and (6) a rapid response media and digital campaign. Resources available on the webpage are updated regularly, providing the latest information and tools for vaccine outreach and access.

-51�Թ���-

The 51�Թ��� is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs 12.3 million men and women, contributes $2.33 trillion to the U.S. economy annually and has the largest economic multiplier of any major sector and accounts for 63% of private-sector research and development. The 51�Թ��� is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 51�Թ��� or to follow us on Twitter and Facebook, please visit