Democrat 2020 frontrunner Joe Biden is calling for a repeal of the Tax Cuts and Jobs Act. A survey released by the National Association of Manufacturers (NAM) shows such a repeal would be a massive blow to manufacturing jobs, wages, and investments.
According to NAM’s Manufacturers’ Outlook Survey from Q1 of 2019, if the tax cuts were repealed:
- 66 percent of manufacturers would have to scale back investment in the United States.
- 62 percent of manufacturers said that they would scale back projected wage increases and bonuses.
- 54 percent of manufacturers said they would cut back on hiring entirely
Small manufacturers have benefited greatly from the 20 percent passthrough deduction, and would be greatest hit if the tax law were repealed.
In 2018, NAM found that manufacturing confidence and job growth hit record-highs.
The survey also showed that 89.5 percent of manufacturers are optimistic about their company’s outlook. This optimism continues a record-high streak averaging 91.8 percent spanning the past 9 quarters.
NAM’s survey also forecasts that:
- Employee wages will continue to rise 2.3 percent over the next 12 months.
- Full time employment will increase 2.1 percent over the next 12 months, suggesting a tight labor market.
- Capital investments will rise 2.8 percent over the next 12 months.
The NAM Shop Floor blog is an excellent resource documenting examples of how the Tax Cuts and Jobs Act has helped manufacturers of all sizes.
The effects of the tax reform bill are being felt all across the economy. In April, the economy added 263,000 jobs, and unemployment is at a 50-year low of 3.6 percent. Over the past year, the economy has added an average of 218,000 jobs per month. Families all across the country are seeing direct tax reduction — on net, households are paying an average of 24.9 percent in lower taxes according to a report released by H&R Block based on their clients’ tax returns.
Biden fashions himself a champion of manufacturing, yet remains obsessed with repealing the very tax cuts which helped revive manufacturing in the United States.