Investments in Cutting-Edge Robots, Manufacturing, and the Tax Code

In Robotic Manufacturing, American Manufacturing

Marlin Steel on December 11, 2014

There are enough tax codes in existence already to make filing corporate taxes a veritable minefield without constant, temporary tax measures being introduced and snatched away from year to year.Back in July, we here at Marlin Steel joined the National Association of Manufacturers in asking small business manufacturers everywhere to urge their representatives in Congress to support the passing of H.R. 4718, a bill that would restore the 50 percent first year expensing provisions that were in effect for the last few years until they expired at the end of 2013, and then make those expensing provisions permanent. Measures such as this are important to helping small business manufacturers grow and add new jobs, which is a large part of the reason why we support the implementation of measures such as H.R. 4718.

Why are these measures important to the manufacturing industry? Pro-investment tax measures such as this help to alleviate the burden of making large-scale technology investments on smaller manufacturers who need capital to keep operations going smoothly. In order to keep up with foreign competitors and offer the best quality products, manufacturers need to be able to make investments in the latest cutting-edge tech, such as how our company was able to invest in the acquisition of a medium frequency direct-current welder for improving our ability to weld parts quickly and efficiently.

Taxes and Business Growth

By accelerating the depreciation rate for new assets, the overall tax burden of acquiring an asset becomes much easier to bear, especially for a small business. This can mean the difference between a manufacturer being able to add a high-tech machine to their factory floor that can grow their capacity to do business, and having to let opportunities to get more contracts slip by because they simply lack the equipment to do a given job.

Without long-term stable tax reforms, the plans of small businesses are being held back by the need to constantly reference current tax codes and short-term benefits. This strangulates a small business’ ability to act on plans based on their current needs and future expansion plans.

Where’s the data to support this argument? In a recent survey of manufacturers that was carried out by Industry Week and the NAM, it was confirmed that “the expiration of the on-again and off-again investment tax incentives have companies holding off on making key purchases, delaying the robust economic growth we need.” Because favorable tax policies have expired, many companies have put off making major investments in their technologies.

Worse yet, uncertainty about future tax rules makes it even harder to justify making a major investment. What happens if your manufacturing company makes a major investment, only to have a more favorable tax code come along a year and a half later? Questions such as this can paralyze companies looking to make a decision to acquire a new piece of technology just as surely as a lack of operating capital can.

With stable, long-term tax incentives, manufacturers can shed the uncertainty of dealing with short-term tax codes for the addition of new equipment to the manufacturing floor. This will allow small business manufacturers to make decisions based on their business needs and growth plans rather than on what this year’s tax code looks like.

By eliminating uncertainty, and continuing to incentivize investments, Congress can help to ensure that small business manufacturers can keep adding jobs and put the American manufacturing industry at the forefront of the world’s manufacturers once again.

Benefits of Investing in Cutting Edge Tech

With the ability to more freely invest in cutting-edge tech, U.S.-based manufacturers can be more competitive with foreign manufacturing centers that rely on cheap labor. Automated manufacturing techniques provide numerous benefits over obsolescent hand assembly methods, including:

  • Increased Productivity.
  • Improved Safety.
  • Better Precision.
  • Greater Profitability.
  • Job Growth.

Unlike human laborers, manufacturing robots don’t get tired, fatigued, or bored over the course of an eight-hour (or longer) shift. They don’t get inattentive and slip up while handling a torch or sharp bit of metal that can cause injuries which demand the shutdown of production. Also unlike manual laborers, a machine can work with incredible precision and consistency—enough to meet tolerances of +/- 1/4000th”—something no manual laborer could hope to meet while making a bend in metal at least once every second.

Having cutting edge technology makes each and every one of your employees more effective and efficient, allowing your company to be more competitive.

However, companies need to be able to make the investment in this kind of cutting edge technology with confidence that they will be able to afford the cost of the investment, which is made easier with stable, long-term tax incentives.

Join Marlin Steel and the NAM in calling for Congress to approve reforms that promote the growth of business and the American economy today.

Marlin Steel Ideal Welding Machine

Author: Marlin Steel
Marlin Steel
Marlin Steel is a leading manufacturer of custom‐engineered products from steel wire and sheet metal. Its industrial material handling containers serve many industries including aerospace, defense, medical and automotive.

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