Detroit — The head of the most influential manufacturing trade group in the U.S. lambasted President Barack Obama’s 2016 budget proposal Thursday saying the $4 trillion plan is a “plan for losing.”
“If the administration’s taxing and spending plan becomes law, business headquarters will be lost and investments will go elsewhere,” Jay Timmons, president and CEO of the National Association of Manufacturers, said during a speech at the Detroit Economic Club.
“And the difficult past in Detroit could potentially be the future in so many communities in America.”
The president released his budget plan on Monday, including a one-time 14 percent tax on about $2 trillion of a corporation earnings that are being kept outside the U.S. The tax is estimated to raise $248 billion over five years, money that would go toward infrastructure projects. The proposal also imposes a 19 percent tax on future foreign earnings, allowing those earnings to be repatriated without additional taxes.
Instead, Timmons called on lawmakers to adopt a plan that focuses on a more streamlined and competitive tax code that reduces high minimum taxes on overseas income, which he said “creates an incentive for businesses to base their headquarters in another country.”
“A competitive tax code isn’t a euphemism for elevating any one group, or taking another group down,” he said. “It’s about opening up new opportunities for the hardworking men and women of the United States to chase their dreams and better their lives.”
Timmons spoke for about 25 minutes during the luncheon, which was held at the Detroit Marroitt Hotel at the Renaissance Center. He highlighted advances in manufacturing, particularly in Michigan, current policy challenges and the manufacturing agenda for leadership.
He also stressed the importance of eliminating tariff and non-tariff barriers to boost international trade.
“International trade supports an incredible hundreds of thousands of jobs in Michigan, folks who trade with customers in more than 200 countries,” he said. “It’s not just original equipment manufacturers: 90 percent of your exporters are small-and medium-sized businesses. A smart trade policy is the difference between growing those businesses and shutting their doors.”
The Washington, D.C.-based National Association of Manufacturers is the largest manufacturing association in the U.S., representing more than 14,000 small and large manufacturers in every industrial sector and in all 50 states.
Detroit was the third of 10 stops on a 17-day national tour for Timmons in the wake of Obama’s budget proposal. He is promoting a tax reform plan that the association says would contribute $12 trillion in GDP, increase investment by more than $3.3 trillion and add more than 6.5 million jobs to the U.S. economy over 10 years.
Timmons blasted what he called the president’s regulatory agenda, saying net neutrality would “slow us down” and that regulation of greenhouse gases could “increase energy prices and make power less reliable.” He also pushed for approval of the Keystone XL pipeline and increased fracking of shale gas.
“If we’re going to keep building on our strength and creating jobs with the potential that energy exports represent an ‘all-of-the-above’ energy approach that taps every resource we’re blessed with here at home,” said Timmons. “We can make the United States energy secure and North America energy independent.”
During his visit to Detroit, which he said was vital to manufacturing — “without you, the story of this great and indomitable country wouldn’t have been possible” — Timmons said he sought to put myths to rest.
When it comes to manufacturing, many people say the industry’s best days are behind it.
“That couldn’t be further from the truth,” he said. “Manufacturing is about incredible new technologies: 3-D printing, nanoscale chemistry, energy efficiency, satellite technology, medicines that are saving lives and changing the world.”
In 2013, Michigan manufacturers accounted for 19 percent of the total output in the state, employing 13.5 percent of the workforce, according to figures from the U.S. Bureau of Labor and Statistics compiled by an economist at the National Association of Manufacturers. Total output from manufacturing was $82.3 billion in 2013, the most recent data available. At the same time, the industry accounted for 555,100 jobs.