MacIver News Service | November 30, 2017
By M.D. Kittle
MADISON, Wis. – Vonco Products, LLC is a Wisconsin economic development success story.
The flexible packaging manufacturer in late 2016 inked a deal with Badger State economic development officials to relocate its operations from northern Illinois just across the border to Kenosha County.
Growth has been good. It could be a lot better if the Republican-controlled congress passes a Â sweeping tax code reform package that would dramatically lower the U.S. corporate tax rate from 35 percent to 20 percent.
As it pledged, Vonco has moved into an 80,500 square-foot plant in Trevor and is far ahead of its commitment to create 86 jobs within three years. As of Thursday, the packaging plant and company headquarters boasted a workforce of 120 employees, and Vonco had far exceed its $4 million investment pledge, according to President and CEO Keith Smith.
Growth has been good. It could be a lot better if the Republican-controlled congress passes a sweeping tax code reform package that would dramatically lower the U.S. corporate tax rate from 35 percent to 20 percent.
“We’ve got a plan to invest roughly another $8 million after investing $12 million over the last year and a half. We can accelerate that investment,” Smith told MacIver News Service in a phone interview Thursday afternoon from Washington, D.C.
The tax reform package is what brought Smith and nearly 20 other Wisconsin small business owners to D.C. this week. They joined about 100 small business owners from across the county to urge lawmakers, including U.S. Sen. Ron Johnson (R-Oshkosh) to vote for the Tax Cuts and Jobs Act, when – or if – it hits the Senate floor.
Johnson has said he’s a no vote unless the tax reform package is amended to include more tax breaks for small businesses, particularly pass-through businesses. The senator asserts corporations get a much bigger tax cut, while putting pass-throughs at a competitive disadvantage.
Smith said Johnson “did a wonderful job” explaining his concerns.
“I applaud him. I’m an LLC. I hope he does a good job convincing folks. It makes sense to level the playing fields,” the executive said. “I urged him to keep up the fight but to make sure we do get tax reform through at this point.”
In an encouraging sign for Smith and other tax reform proponents, Johnson joined Republican holdouts Sens. Bob Corker of Tennessee and Jeff Flake of Arizona to help kill the Democrats’ effort to send the measure back to the Senate Finance Committee.
“People don’t put money in the proverbial mattress. This money gets put back into the market, and that drives growth…It creates a velocity in the economy that’s going to spur the growth we need to attack the debt.”
Corker and Flake are itchy about a new analysis that found the tax cuts could add $1 trillion to the $20 trillion U.S. debt. But the review, like others, lean heavily on more conservative estimates, failing to take into account the full potential growth unleashed by lowering tax burden.
Smith says his company wouldn’t sit on its tax cut.
“People don’t put money in the proverbial mattress. This money gets put back into the market, and that drives growth,” he said. “It creates a velocity in the economy that’s going to spur the growth we need to attack the debt.”
After Thursday’s meeting, Smith said he’s feeling better about congress getting tax reform done by the end of the year.
“I think they’ll have enough compromise to get it through,” he said.