U.S. Senator Pat Toomey (R-Pa.) released a report today detailing the impact of President Obama's proposed tax policies on the American manufacturing industry.
The report looks at ten Pennsylvania manufacturers throughout the state, finding that President Obama's plan to raise marginal income tax rates will put these manufacturers and many others at a competitive disadvantage with respect to their foreign counterparts, hindering economic growth and job creation. According to a 2012 Ernst &Young report, the president's onerous tax policies will cost Pennsylvania nearly 31,000 jobs.
Most manufacturers organize as "pass-through" companies and pay income taxes at the individual rate as a result, instead of at the corporate rate. Under President Obama's tax plan, Pennsylvania companies will see their marginal tax rate jump from the current rate of 35 percent to 41 percent.
American manufacturers already pay the highest business tax rate in the world at 35 percent. The president's plan will only exacerbate the competitive disadvantage our manufacturers face, forcing them to compete with foreign companies paying rates as low as 25 percent in China, 15 percent in Canada and 22 percent in South Korea.
"President Obama's tax policies will make it even harder for Pennsylvania manufacturers to create jobs and compete with their foreign competitors," Sen. Toomey said. "We need to implement policies that encourage manufacturers to stay in Pennsylvania and expand their businesses, not encourage them to move to countries with more competitive tax rates. We simply cannot afford the president's unfair tax policies."
The report includes ten case studies from manufacturers across Pennsylvania, detailing how these companies will be hurt by the president's policies. These are:
· Richardson Cooling Packages, Lawrence County
· Weiler Corporation, Monroe County
· American Bar Products, Bucks County
· Keystone Profiles, Beaver County
· Weatherly & Hazleton Casting, Luzerne County
· Fralo Industries, Erie County
· Worth & Company, Inc., Bucks and Lehigh Counties
· Precision Medical Products, Lancaster County
· Glenn O. Hawbaker, Inc., Centre County
· Medical Device Company, Southeast Pennsylvania