Tax Reform: You Got It. Now What Are You Going to Do with It?
Monday, January 29, 2018
Posted by: Alyce Ryan
You got it. Now what are you going to do with it?
Manufacturers achieved a major legislative victory in December when Congress passed President Trump’s signature initiative: tax reform. For the first time in 30 years our tax code has been reshaped to reduce corporate and individual rates, close certain loopholes and simplify the annual filing process. The legislation responds to what the manufacturing community has long been asking for: a competitive tax code that will spur investment, create jobs, improve wages and grow our economy. In fact, in a recent survey by the National Association of Manufacturers (NAM), Sixty-three percent of manufacturers surveyed said comprehensive business tax reform would encourage their companies to spend more on their facilities and equipment, and 58 percent said they would expand their businesses. In addition, 54 percent said they would hire more workers, and almost half (49 percent) planned to increase wages and benefits.
And now the business community is stepping up. In recent weeks we have seen announcement after announcement from Blue-Chip America about the benefits being conveyed due to the tax reform legislation: Walmart; AT&T; Boeing; Southwest Airlines, among others. Some politicians have criticized this as "crumbs;” I say it’s a step in the right direction – a goodwill effort by our nation’s manufacturing and business community to "put our money where our mouth is.”
Now the question is, closer to home, what will you do with it? What will the independent sector of the corrugated, folding carton and rigid box industries do? A year-end check-in survey which AICC conducted among its members paralleled NAM’s findings: 70% of members responding said they plan on investing in new or used equipment; 56% said they plan on expanding their businesses either via physical expansion or acquisition; and another 40% said they would hire more workers.
And AICC members are making good on their reported plans: we saw last week the lead of a prominent AICC member, The Lawrence Paper Company in Lawrence, Kan., whose President and CEO, Justin Hill Jr., gave $500 bonuses to each of the company’s 300 employees and announced plans to invest $5 million in new equipment. On top of that, he’s planning a 60,000 square-foot expansion of its Jayhawk Packaging Division in Fremont, Neb. Hill’s message made local news in the The Hutchinson Post, industry news in The Packaging Portal, and even national news when he appeared on Fox Business Network with host Stuart Varney. So while Blue Chip America is getting a lot of attention in the wake of the tax bill, let’s hear it for the independents in our industry who are also sharing the benefits. What about you? What is your company doing?