Chuck Grassley: “Senators Kyl and Nickles say that a lower rate just for manufacturing is ``bad tax policy and is virtually without…”

“Senators Kyl and Nickles say that a lower rate just for manufacturing is ``bad tax policy and is virtually without precedent in our history.'' Well, this is just wrong and the evidence is staring them in the face. FSC/ETI itself is a tax cut for manufacturing. FSC/ETI keeps U.S. manufacturing competitive by lowering tax rates on exports. Manufacturers could lower their rates by 3 to 8 points. The Joint Committee on Taxation says that 89 percent of all FSC/ETI benefits go to manufacturing companies. The Kyl-Nickles Treasury proposal would take money from FSC/ETI and spread it to other industry sectors. Kyl-Nickles will be a $50 billion tax increase on manufacturing. It will not send the FSC/ETI repeal money back to manufacturing. It is mathematically impossible for their proposal to work any other way. We know that tax increases do not create jobs. So why would Senator Kyl and Nickles increase manufacturing taxes by $50 billion? There are other reasons why we did not go the route of the Kyl- Nickles approach. First, their top-level rate cut would only go to the biggest corporations in America. It would not go to family-held S corporations, partnerships, or smaller corporations. Under the Finance Committee bill, all manufacturers in America, regardless of size, get a 3-point rate cut, including S corporations and partnerships.”