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Thursday, July 19, 2012

House Holds Hearing Today on Tax Reform and the Manufacturing Sector

House LogoThe House Ways & Means Committee holds a hearing today on Tax Reform and the U.S. Manufacturing Sector:

This hearing will examine how the current tax system affects U.S. manufacturers, including U.S.-based public and closely held companies as well as foreign-owned U.S. manufacturers, and how comprehensive tax reform might affect their ability to expand and create jobs.

  • Kim Beck (Association for Manufacturing Technology)
  • Heather Boushey (Senior Economist, Center for American Progress)
  • Diane Dossin (Chief Tax Officer, Ford Motor Company)
  • Susan L. Ford (Vice President of Tax, Corning Inc.)
  • Henry W. Gjersdal, Jr. (Vice President of Tax and Real Estate, 3M)
  • Ralph E. Hardt (President, Jagemann Stamping Company)
  • Hugh Spinks (Vice President of Tax, Air Liquide USA Inc.)

In connection with the hearing, the Joint Committee on Taxation has released Background and Present Law Relating to Manufacturing Activities Within the United States (JCX-61-12):

This document ... describes and analyzes present Federal income tax rules applicable to businesses with respect to capital cost recovery, expensing provisions, tax credits related to capital investment, the treatment of research and development costs (including the research tax credit), and the treatment of income from domestic qualified production activities. Data from 2009 show that the manufacturing sector accounts for the largest share of depreciation deductions at $195.7 billion (27.5% of all such claims in 2009). Included in the $195.7 billion amount is $3.6 billion in section 179 deductions (7.0% of all such claims) and $40.7 billion in bonus depreciation deductions (20.0% of all such claims). Taxpayers claimed $14.2 billion of deductions for domestic production activities in 2009, almost two-thirds of which ($8.9 billion) was claimed by taxpayers in the manufacturing sector. Taxpayers in the manufacturing sector also claimed $5.6 billion in research credits (68.6% of all such claims in 2009).

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