Monday, December 6, 2010

Help Us Pass the MRA Bill in Congress

· Extend the Bush era tax cuts for 2 years for incomes up to $1million dollars

· Pass MRA now

MRA is a perfect offset for smaller manufacturing companies that are the backbone for the U.S. supply chain and who face the prospect of a 39.6% tax rate reset. The majority of companies in this category have less than 500 employees.

Profit should not be a dirty word. Most business models are built to throw off 4-8% pre-tax profit. Not an unreasonable margin for a company with a headcount of 50 employees and $5,000,000 in sales. The current upper 35% marginal rate confiscates earned income and cash flow that could be better deployed and re-invested. Business owners understand how to grow their companies. We do not need the government to compete with us for our working capital.

New cutting edge capital equipment can easily cost $200-700,000. Debt service at this level makes for a lot of sleepless nights particularly during wild swings in the economy and government regulation uncertainty.

As companies win back global market share, payrolls will eventually grow and some business owners may commit to expand their manufacturing footprint. New brick and mortar projects are the perfect answer for cities and communities facing tepid local free market investment.

MRA is a smart, optional, re-investment strategy to help boost U.S. manufacturing sector competitiveness in the global marketplace.

Over time, if we are patient, disciplined and focused, re-investment will lead our economic recovery.

Let’s get this passed in the new congress. Seize this moment in history.

-Hugh F. McCann Jr.

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