Sen. Mike Crapo, R-Idaho, unveils the proposed tax code and tariffs under President-elect Donald Trump on “Kudlow.”
FIRST ON FOX: A study released by the National Association of Manufacturers (NAM) shows that nearly 6 million American jobs are at stake if President-elect Trump’s 2017 tax cuts expire.
Fox News Digital first obtained a copy of the study conducted by Ernst & Young on behalf of the largest manufacturing association In the United States, it was found that if Congress does not act by the end of 2025 to preserve the Tax Cuts and Jobs Act, an estimated 5.9 million American jobs will be lost.
NAM argued that key pro-manufacturing provisions regarding R&D, capital investment, and business loans of the Tax Cuts and Jobs Act of 2017 have already been phased out in 2022 and 2023, and several other provisions, namely the 20% pass-through deduction, individual tax rates and the inheritance tax exemption threshold should expire at the end of 2025.
The study estimates that the U.S. economy will face $540 billion in lost wages and a $1.089 billion GDP shortfall if the remaining provisions of the Tax Cuts and Jobs Act expire. . Additionally, if Congress does not continue the reforms, 1.137 million manufacturing jobs, $126 billion in manufacturing workers’ compensation and $284 billion in manufacturing GDP will be at stake, the study finds. .
“The time to act is now. Millions of American workers depend on manufacturing to keep America moving forward,” said Jay Timmons, president and CEO of NAM. “The pro-growth tax policies stemming from President Trump’s 2017 tax reforms have been a rocket engine for manufacturers and made the U.S. economy more globally competitive. Manufacturers have delivered on our promises to create jobs, increase wages and benefits, and invest in our community. , policymakers can choose economic growth over economic disaster and protect Americans’ livelihoods. »
GREAT PRESSURE TO PROTECT AND RENEW Trump TAX CUTS LAUNCHED BY POWERFUL CONSERVATIVE GROUP
President-elect Donald Trump speaks to the media during a press conference at Mar-a-Lago January 7, 2025, in Palm Beach, Florida. (Scott Olson/Getty Images)
Timmons argued that preserving tax reform should be one of the top priorities of the new Congress and the new Trump administration.
“If Congress delays, manufacturers will be forced to delay investment and job creation decisions due to the uncertain outlook. In 2017, Congress passed the landmark Tax Cuts and Jobs Act at the end of the year, meaning manufacturers’ investment decisions based on the law may not bear fruit until 2018 at the earliest,” Timmons said.
In 2018 and 2019, respectively, manufacturing capital spending grew by 4.5% and 5.7%, compared to growth of just 1.4% in 2017.
Timmons noted that manufacturers also created 267,000 new jobs in 2018, representing the best year of manufacturing job creation in 21 years.
“This time, we cannot afford to wait: with the expiration of crucial provisions of the TCJA in recent years, the economy is already in decline,” he said. “After immediate R&D spending expired in 2022, R&D growth in the EU exceeded that of the United States for the first time in almost a decade, and R&D growth in China tripled ours. Congress and President Trump should work quickly to boost activity this year by taking action. We urgently need to give manufacturers the tax security they need to plan long-term job-creating projects. »
NAM says Congressional inaction risks higher taxes on pass-through and family-owned businesses; increased costs of R&D, purchase of capital goods and business loans; and “an uncompetitive international tax regime that discourages investment in the United States and hinders the ability of manufacturers to compete on the global stage.”
House Republican leaders have indicated they agree with retaining the 2017 tax reforms.
Mike Johnson, R-La., delivers remarks after being re-elected Speaker of the House on the first day of the 119th Congress, January 3, 2025. (Chip Somodevilla/Getty Images)
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“Failing to extend the Trump tax cuts could result in the loss of an estimated 6 million jobs and the devastation of America’s manufacturing sector,” House Speaker Mike Johnson, R-La., said in a statement. press release. “It is Congress’s responsibility to act quickly so we can protect American livelihoods, prevent wage cuts, and avoid the largest tax hike in history. We all know the importance of do things here in AmericaSo House Republicans are working hard to preserve and expand President Trump’s historic tax reform and support American manufacturers. »
House Majority Leader Steve Scalise, R-La., said Trump’s Tax Cuts and Jobs Act of 2017 “not only strengthened America’s manufacturing sector, but also fostered job growth, spurred innovation, increased take-home pay for working Americans hard and increased the competitiveness of the United States.
“With President Trump returning to the White House and Republican majorities in the House and Senate, we must act quickly to ensure global competitiveness is maintained, support investment and innovation, and protect small businesses and workers,” Scalise added. “Hard-working Americans deserve a strong economy that works for them, not against them. House Republicans are ready to prevent the largest tax hike in history and make our economy great again .”
Jay Timmons, President and CEO of NAM (Andrew Harrer/Bloomberg via Getty Images/File)
“This study confirms the need to immediately extend the Trump tax cuts this year by showing the real devastation that America’s small businesses and manufacturers will suffer if we do not act,” said the chairman of the House of Commons and House Rep. Jason Smith, R-Mo. “With nearly 6 million jobs on the line, Congress must act quickly to give the green light to American small businesses, families and communities across the country to hire more workers and expand their businesses to restore the most quickly possible the greatest saving of our lives.
“The last thing they need is the largest tax increase in American history,” Smith added. “Ways and Means Republicans have been preparing for this moment for nearly two years and are ready to deliver an economic package that will make American manufacturing great again.”
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The study also prompted a response from the upper house of Congress. Senate Finance Committee Chairman Mike Crapo, R-Idaho, said Trump’s tax reform “allowed Americans to keep more of their hard-earned money and allowed businesses to invest in their ideas, products and people.” He added that making these tax cuts permanent “is the best way to ensure the greatest economic growth, provide certainty and stability for American businesses, and avoid the economic losses described in this study.”
A news conference to further discuss the study is expected to take place at the Capitol on Tuesday afternoon.
