Manufacturing will, as always, be the foundation for economic recovery and for prosecuting the war on terrorism. However, the manufacturing sector was already in one of the most serious recessions in the past three decades prior to Sept. 11. Why? In large part because manufacturing depends on state-of-the-art production equipment, and manufacturers have been hampered by archaic and counter-productive capital equipment depreciation rules for years.
U.S. Reps. Phil English, R-PA, and Richard Neal, D-MA, introduced the High Productivity Investment Act (HPI) to begin correcting this. Investment in productivity-enhancing machinery and equipment would be deducted more quickly under HPI than under present law, thereby reducing its after-tax cost and increasing its availability to businesses of all sizes. James Mack, vice president of government relations for AMT--The Association for Manufacturing Technology, says HPI is AMT's top legislative priority in the 107th Congress.