The National Association of Manufacturers (NAM) has released a report indicating that the expiration of pro-business tax policies from the 2017 federal tax reform could significantly impact the U.S. economy. The research, conducted by Ernst & Young, suggests that nearly 6 million jobs could be lost if Congress does not extend these tax cuts set to expire at the end of this year.
According to NAM, the potential economic damage includes more than $1 trillion in losses, with the manufacturing sector being heavily affected. Jay Timmons, President and CEO of NAM, emphasized the urgency of maintaining these policies: “The time to act is now. Millions of American workers are depending on the manufacturing sector to continue driving America forward.”
Timmons highlighted that the 2017 tax reforms were crucial for manufacturers, enhancing job creation and economic competitiveness globally. He stated, “Pro-growth tax policies from President Trump’s 2017 tax reforms were rocket fuel for manufacturers and made the U.S. economy more competitive on a global scale.”
In New Jersey alone, where over 7,000 manufacturers operate, an estimated $31.9 billion in economic output could be lost if these tax cuts expire. The report forecasts that 162,000 jobs in New Jersey are at risk.
Nationally, the impact would include a loss of 5.9 million jobs, $540 billion in wages, and $1.089 trillion in GDP. Specifically for U.S. manufacturing, there would be a loss of 1.137 million jobs, $126 billion in wages, and $248 billion in GDP.
NAM warns that allowing provisions of the Tax Cuts and Jobs Act to lapse would lead to higher taxes on pass-through businesses and family-owned firms; increased costs for R&D and capital equipment purchases; and an uncompetitive international tax regime discouraging investment in the U.S.
The organization pointed out that following the enactment of these reforms in 2018, manufacturing experienced significant job creation and wage growth not seen in decades. Manufacturing capital spending also saw notable increases during this period.
NAM maintains that savings from tax reform have been used by manufacturers to expand their operations and invest back into their communities: “When manufacturing grows, the economy grows.” Conversely, they argue that tax increases negatively affect economic performance.
A summary of this research is available through NAM's resources.
