This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.  
  • Delicious




US Manufacturers Call For Tax Cuts

by Mike Godfrey, Tax-News.com, Washington

06 February 2008

Lobbyists for the United States manufacturing sector are calling for policymakers to stimulate economic growth by reducing the capital gains tax on business.

In a panel discussion moderated by economist and CNBC host, Larry Kudlow, National Association of Manufacturers President and CEO, John Engler on Monday joined Loews CEO, James S. Tisch in outlining a proposal to reduce the current 35% long-term capital gains rate to 15%, which they said would unleash trillions of dollars in the economy that are otherwise “locked in” because of the current rate.

“The current 35% rate on corporate capital gains, which has been in effect since 1986, creates a ‘tax wedge’ that makes many potential transactions uneconomic,” Engler explained. “Reducing the capital gains tax on business will allow corporations to take what are often stale assets and move them into the hands of other businesses who will put them to more efficient use.”

“The result of a tax reduction would mean potentially billions of additional tax dollars flowing into the federal Treasury,” Tisch added. “Simply put, 15% of something is a lot better than 35% of nothing.”

Also speaking at the conference, attended by CEOs and business leaders from the metropolitan area, was economist and Senior Fellow at the American Enterprise Institute, Kevin Hassett. “The United States has the second highest tax on capital in the world,” Hassett noted. “We would be wise to follow other countries like Germany, France and England, which have all slashed their capital gains rates and witnessed a lower cost of capital and huge economic benefits.”

The group outlined a strategy that includes the introduction of legislation into Congress later this month. “When Congress is looking for tax reforms as part of their economic stimulus package, reducing the long term rate on capital gains looks very appealing,” stated Tisch. “We have received tremendous support from both Democrats and Republicans on this idea.”

 

 






Write a comment