NAM Endorses Permanent Tax Relief in White House's Fiscal 2007 Budget

"Manufacturers have been joined by the National Academies, members of Congress from both parties and many other respected sources in academia and business for years in calling for a new dedication to innovation and competitiveness," explained NAM President John Engler. "So, we're pleased to see the president's American Competitiveness Initiative get some real funding support in this budget.

"If any new initiative can garner bipartisan support on Capitol Hill in an election year," Engler said, "it ought to be one that makes smart investments in the education, research and technological developments so vital to America's economic future."

NAM Vice President for Tax and Domestic Economic Policy Dorothy Coleman cited the fact that manufacturers perform more than 60 percent of the nation's private sector research and development and are "thrilled with President Bush's proposal to make the currently expired R&D credit permanent and retroactive to the start of this year."

Acknowledging that it will take time to digest all the details of the new $2.77 trillion budget, Coleman identified at least two early concerns with proposed Commerce Department funding.

"If improved competitiveness is our goal, it may be penny-wise but pound-foolish to cut the successful Manufacturing Extension Partnership program by more than half," to $47 million from its current level of $106 million. "Similarly, the Advanced Technology Program is once again slated for termination," Coleman reported. "But on the positive side, the $1.7 billion in fees projected to be collected by the Patent and Trademark Office will be returned to that office so it can better manage its huge and growing workload."

Returning to taxes and reiterating the NAM's strong support for making permanent the pro-growth tax relief passed earlier in Bush's presidency, Coleman pointed out that, "Overall federal tax revenues in 2005 were up by $274 billion or 15 percent; corporate tax revenues rose by nearly 50 percent; and, contrary to dire warnings from static-model-loving opponents of tax relief, even capital gains tax receipts surged by 45 percent," after a substantial reduction of the capital gains tax rate from 20 percent to 15 percent in 2003.

"History and these more recent data ought to make it clear to everyone by now that spurring robust economic growth with smart, pro- growth tax policy is the proper way to reduce budget deficits over the long haul," Coleman concluded.