"Few issues are more important to the American people than the availability of good jobs in their communities," said Senator Collins. "Nowhere is the reality of job losses in the manufacturing sector more acute than in Maine. These job losses in the past three years in the manufacturing sector in Maine represent more than 22 percent of state's total manufacturing employment - a higher percentage of manufacturing jobs lost than any other state in the country."
She added, "A healthy manufacturing base is essential to our nation's future. Not only is manufacturing a key source of skilled, high-paying jobs, but it is also critical to our economic and national security that we have the ability to manufacture the goods we need right here in this country."
Senator Collins' bill would provide tax incentives for manufacturing companies that hire workers who have lost manufacturing jobs and are eligible for Trade Adjustment Assistance (TAA). Senator Collins' bill would also provide other tax incentives for domestic manufacturers that would not be available to manufacturers that relocate overseas. In addition, the bill includes incentives to help the forest products industry, which provides more manufacturing jobs in Maine than any other sector of the state's economy. "The bill is designed to ensure that only companies that are helping to build America's manufacturing base obtain its benefits. It has both a carrot and a stick approach," said Senator Collins.
According to a recent report released by the National Association of Manufacturers, the cost of manufacturing a product in the US is over 22 percent higher, on average, than it is in other nations. The report points to the higher cost of doing business in the US as one reason why manufacturing companies are either scaling back on their workforce, moving overseas, or going out of business altogether. Among the major reasons for the high cost of manufacturing in the US is the high corporate tax rate, according to the report.
A summary of the "Growing Our Manufacturing Employment Act of 2004" is as follows:
· A tax credit to hire dislocated workers. Specifically, Senator Collins is working to restore manufacturing jobs by providing tax credits to companies that hire individuals who have lost their manufacturing industry jobs and are eligible for TAA, a federal assistance program for individuals who have lost their jobs due to trade. This tax credit would apply in 2004 and 2005.
· Help for manufacturers that produce goods in the United States. Senator Collins's bill includes a deduction of 9 percent that would reward manufacturers for producing goods in the US and help them to compete in a global market.
· Sustaining our wood products industry. The bill includes provisions to help sustain the forest products industry by increasing the supply of fiber, the material that fuels the industry, through tax incentives to woodlot owners and reforestation incentives.
· Cracking down on businesses that move overseas or engage in sham tax transactions. The legislation also includes fiscally responsible offsets that help pay for the jobs provisions by penalizing companies that move their headquarters overseas to avoid paying taxes in the US.