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December 7, 2017

New Balance: Tax reform bill would help domestic manufacturing

Courtesy / Office of U.S. Rep. Bruce Poliquin
Courtesy / Office of U.S. Rep. Bruce Poliquin
U.S. Rep. Bruce Poliquin, R-Maine, catches a behind-the-scenes glimpse at a New Balance manufacturing facility in Maine during a visit in 2016. The Boston-based shoe manufacturer, which employs 900 people at three factories in Maine, issued a statement Wednesday applauding the Republican tax reform legislation supported by Poliquin an U.S. Sen. Susan Collins, saying it enhances the company's ability to grow and add jobs at its five facilities in New England.

New Balance, which employs 900 people at its Maine manufacturing facilities in Skowhegan, Norridgewock and Norway, issued a statement Wednesday commending U.S. Sen. Susan Collins, R-Maine, for her support of the Republican-led tax reform legislation approved by the Senate early Saturday morning.

The footwear company is headquartered in Boston and has five facilities in New England. It has more than 7,000 employees around the world and reported worldwide sales of $3.8 billion in 2016. www.newbalance.com

The company's public support of Collins comes at a time when Maine's senior senator is taking heat for supporting the Senate's "Tax Cuts and Jobs Act," which is now in the hands of a congressional conference committee charged with reconciling differences between the Senate's tax reform legislation and the version approved by the House last month. As reported by the Bangor Daily News, five protesters were arrested Monday night after staging a sit-in at Collins' Bangor office over her support of the Republican bill. "I'm shocked Sen. Collins would buy into that [bill]," one of the protesters, Jim Betts, 66, of Winthrop, told the newspaper.an

But New Balance applauded Collins for supporting legislation it said in a news release "will enhance the ability of the company to grow and create additional jobs in key U.S. regions like Maine."

"New Balance is proud to employ hundreds of hardworking Americans who manufacture athletic footwear in the United States," the company said in its statement of support. "We applaud Sen. Collins' efforts to encourage greater growth at our U.S. factories by reducing the corporate tax burden, incentivizing capital investment and creating long-term certainty. The Senate bill will allow New Balance to be more competitive and manufacture more footwear in Maine that we can export across the globe."

New Balance cited three changes included in the Senate tax bill that are particularly important to the company:

  • The lowering of the corporate tax rate from 35% to 20%. "This significantly reduces the incentive for companies to move operations overseas in search of lower tax rates," the company stated. "Companies like New Balance, which already has a strong domestic manufacturing presence, will be able to increase investments in their facilities and be more globally competitive while remaining a U.S. company hiring U.S. workers."
  • Improves cost recovery for capital investments. "These provisions will allow businesses to fully expense or more quickly depreciate newly purchased assets, meaning companies will buy more property, equipment, and machines for use in the U.S," the company stated. "This will lead to more jobs for U.S. workers, more revenue for sellers and bigger paychecks for employees."
  • Its ability to bring back foreign profits through deemed repatriation. "The return of foreign profits at lower tax rate is a major incentive to build and grow in our communities," the company stated. "New Balance will invest these funds in the development and expansion of our facilities in New England."
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