MTB = Manufacturing Tax Breaks
Bipartisan Leaders of the Ways and Means Committee last week introduced legislation to reform the Miscellaneous Tariff Bill (MTB) process. Through the MTB, Congress temporarily suspends or reduces tariffs (or taxes) for certain imported products not made in the United States, helping American manufacturers reduce costs, create jobs, and compete in the global marketplace.
MTB is a wonky, Washington term, but it has serious consequences for our economy. Here’s what MTB really means: Manufacturing Tax Breaks.
The last MTB – or manufacturing tax breaks – expired in 2012, so manufacturers have been struggling with higher taxes for several years. According to the National Association of Manufacturers, U.S. companies have been hit by a $748 million tax hike each year, undercutting their ability to compete and costing our economy $2 billion annually.
As one witness explained at a recent Ways and Means Trade Subcommittee hearing:
“Each day that passes without a temporary [MTB] or some other easier new process for fixing the tariffs that penalize U.S. manufacturing limits our ability to make products and provide jobs here while competing on the global playing field.”
That’s why members on both sides of the aisle and on both sides of the Capitol are working to improve the process for crafting and passing the bill and helping manufacturers. Known as the American Manufacturing Competitiveness Act of 2016, the bipartisan, bicameral legislation will create an open and transparent process for the House to consider manufacturing tax breaks through the Miscellaneous Tariff Bill (MTB). The new process will help American manufacturers compete in the global market while also upholding the House earmark rules.
Here’s how the new, three-step process works:
- Local U.S. businesses petition the independent, non-partisan International Trade Commission (ITC), explaining their need for a specific tariff reduction or suspension. After the independent panel receives these petitions, it solicits comments from the public and the Administration and conducts its analysis.
- The ITC issues a public report to Congress with its analysis and recommendations regarding products that meet the MTB standards, including that there is no domestic production.
- The Ways and Means Committee examines the ITC’s recommendations and drafts a MTB proposal.* Congress would then consider the MTB within existing rules.**
* While the Committee can exclude products from its final proposal, it cannot add products that were not recommended by the ITC.
** As required by House rules, Ways and Means would certify that there are no spending earmarks and would publish a list of any Limited Tariff Benefits (LTB).
Manufacturers representing all different industries – from textiles to sporting equipment to chemicals — have voiced their support for this new process because they know it will help their businesses and the American economy grow. National Taxpayers Union, Americans for Tax Reform, and nine other pro-growth organizations wrote in support of the legislation:
“We applaud you on creating a revised MTB process that increases transparency, avoids the pitfalls of earmarking, and sets the table for economic growth. Our organizations are pleased to endorse your bill and hope it will be swiftly enacted into law.”
The Ways and Means Committee will mark up this bipartisan, bicameral bill on Wednesday, April 20, at 10:00 a.m. ET. For more information, click here.