By Jay Moon
Manufacturing in the United States is poised for a renaissance not seen at any other time in recent history. The past decade has seen new investments in automation and efficiencies that have significantly increased industrial productivity. Added to these rapid technological advancements, new proposals by the Trump administration promise to make U.S. based manufacturing more globally competitive. These proposals, if enacted, will once again position American’s industrial sector as the driving force of our economy. The three broad categories of reform—regulatory relief, tax adjustment and infrastructure investment—individually and collectively, will position America’s manufacturing base to remain globally competitive.
After years of increasingly onerous, and expensive, regulations being forced on business and industry by unelected bureaucrats in Washington, Congress and the Trump administration have begun to rescind or drastically scale back these mandates. According to a recent study by the National Association of Manufacturers (NAM), “Since 2009, 637 major new regulations—defined as having an annual effect on the economy of at least $100 million—have been issued through October 2016.” Considering that manufacturers were the frequent target of these regulations, each new rule translated into increased compliance costs that put our companies at a major disadvantage with their global competitors. By removing these barriers to success, our nation’s manufacturers can begin to operate under a regulatory process that is both fair and scientifically based.
Similarly, our current tax system puts American manufacturers at a competitive disadvantage. We have the highest corporate tax rate among developed countries. When this rate is combined with state taxes, manufacturers face an aggregate tax burden that can reach 40 percent or higher. In addition to a high tax rate on profitability, manufacturers have to contend with dozens of additional taxes at the federal, state and local levels that impact their bottom line. Fortunately, leadership in Congress is focused on advancing pro-growth, pro-competitive tax reform policies that will strengthen our economy, create jobs and promote investment in America. This comprehensive approach to tax reform, which has not happened since the mid-1980s, will be the catalyst to allow U.S. companies to compete effectively in the 21st century world economy.
Equally as important as reforming our outdated tax and regulatory structures, America needs to invest heavily in our nation’s critical infrastructure. As manufacturing evolves and supply chains become more complex, we simply cannot rely on infrastructure that was designed and built in the 1950s and 60s. To prevent falling further behind, our political leaders must focus on an all-of-the above approach to infrastructure, with substantial investments in roads, bridges, ports, waterways, airports and rail. This will not only improve our ability to move products cheaper and more efficiently, but will also create thousands of jobs as we build a modern 21st-century infrastructure.
Mississippi’s manufacturers stand ready to support our Congressional delegation and the Trump administration in pursuit of these important goals. Just as industry has adapted and innovated over the past quarter-century, our policymakers must also seize this opportunity to enhance our global competitiveness with bold changes to the systems that impact our economic future. By removing regulatory roadblocks, reforming taxes and investing in infrastructure, manufacturing is poised to lead the way toward economic expansion and job creation that is so desperately needed right now. We cannot afford to be complacent and let other nations replace us as the world’s greatest manufacturing economy.
Jay Moon is the Executive Director of the Mississippi Manufacturer’s Association.