WASHINGTON – Democratic presidential front-runner Hillary Clinton unveiled a plan Tuesday to spur investment in the sagging manufacturing economy, including Minnesota’s Iron Range.
The plan, which she calls the “Manufacturing Renaissance Tax Credit” builds on an existing tax provision called the New Markets tax credit — a provision around since 2000 that allows communities and other development entities to apply for access to capital in exchange for technical assistance for businesses.
This existing tax credit is popular with Republicans and Democrats on Capitol Hill and some lawmakers have called for making the new credit permanent, saying it has generated $31 billion in investments in communities with high rates of poverty and unemployment.
Under Clinton’s plan, eligible communities could also choose a zero capital gains option, allowing investors who invest in capital in these distressed communities for longer than five years be eligible for not having to pay capital gains taxes on proceeds from their investments.
“By strengthening our manufacturing sector for the future, we can help create the next generation of good-paying jobs,” Clinton said in a statement.
The announcement comes ahead of a trip Clinton plans to Minnesota next Tuesday for a fundraiser. Staffers say there will likely be a public event, as well, though no details have been provided.
Earlier in December, manufacturing facilities in Minnesota and Midwest reported the worst monthly business conditions in three years. The closely watched nine-state mid-America Business Conditions Index, compiled by Creighton University, saw its manufacturing measure fall to 41.1 as factories were battered by large declines in sales, production inventories and employment.
Any index below 50 signals economic retraction, so economists are quite concerned about the dismal numbers.
Manufacturing leaders say weakening currencies and softer economies have added pressure companies already faced by sluggish oil and agricultural markets. There are global buying weaknesses currently in parts of Europe, Brazil, Canada and China, which together have had a harsh effect on American manufacturers.
In addition, the flood of low-cost foreign steel has hurt much of the steel and iron ore production on the Iron Range. More than 9,000 people have been laid off nationally, including nearly 2,000 workers on the Iron Range, representing more than 40 percent of the region’s mining workforce.