Contact:        Missy Branson, 202-822-8026                                                                     May 10, 2006

                        Cass Johnson, 202-822-8025     

NCTO Urges Quick Passage of Tax Reconciliation Package

Investment Tax Incentives Are Essential for

 U.S. Textile Manufacturers

Washington, DC) The National Council of Textile Organizations today urged the House and Senate to quickly pass H.R. 4297, the Tax Increase Prevention and Reconciliation Act of 2005.  NCTO is the national trade association representing all sectors of the U.S. textile industry through its Fiber, Yarn, Fabric and Home Furnishings, and Industry Support Councils.

In response to completion of the House/Senate conference on the tax package, Jim Chesnutt, Chairman of NCTO, noted “this legislation provides important incentives for continued investment in U.S. textile manufacturing that will help ensure the future competitiveness of our industry. Extending the current lower rates on capital gains and dividends and maintaining the current levels for expensing will have a positive impact on the U.S. textile industry and will help stabilize our industry against further job losses caused by low-cost imports from China.”

The Jobs and Growth Act of 2003 increased the amount that small businesses may expense from $25,000 to $100,000 for three years (through the end of 2005).  The 2003 tax relief package increased from $25,000 to $100,000 the amount of new investment a business can expense in a given year.  The law also increased from $200,000 to $400,000 the amount of total investment a business can make in a year and still qualify for expensing under Section 179.  H.R. 4297 includes provisions providing for a two-year extension of enhanced Section 179 expensing for small businesses.

Chesnutt further noted that “U.S. textile manufacturers also support the provisions in H.R. 4297 to extend for two-years the lower rates on capital gains and dividends.  These provisions provide much-needed incentives for continued investment in America’s textile and apparel manufacturing sectors which still employ almost one million workers.  The Congress must act to provide America’s manufacturers with the necessary tools to remain competitive and to continue exporting our products.  It is important to recognize that the U.S. textile industry is the third largest exporter of textile products in the world – exporting more than $16 billion in products in 2005.”

To review a summary of H.R. 4297click here:  http://waysandmeans.house.gov/media/pdf/taxdocs/050906longsummary4297.pdf

Key Facts about the U.S. Textile Industry

·         One of the largest manufacturing employers in the United States, the overall textile sector employs nearly one million workers (973,000).  Textile mills alone employ 416,000 workers.

·         Third largest exporter of textile products in the world – more than $16 billion in 2005.  The U.S. textile industry exports to more than 50 countries, with 20 countries buying more than $100 million a year.

·         Supplies more than 8,000 different textile products a year to the U.S. military.

·         Contributed more than $60 billion to the U.S. GDP in 2004.

·         Invested more than $30 billion in new plants and equipment over the last 10 years.

·         Textile mills rank near the top of all manufacturing sectors in productivity growth over the past ten years. 

·         Textile workers earn an average of 60 percent more than retail workers ($497 a week vs. $301) and get health care and pension benefits.

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