NEW CASTLE —
The head of a New Castle firm said President Obama’s tax policies would have a negative effect on his business.
Dave Richardson, president of Richardson Cooling Packages, said a tax increase would put his company at a competitive disadvantage.
The firm is one of 10 Pennsylvania manufacturing companies cited in a report commissioned by U.S. Sen. Pat Toomey on the effect of Obama’s plan to raise marginal income tax rates.
Toomey, a Republican, said this week that manufacturers such as Richardson Cooling Packages organize as “pass-through” companies and pay income taxes at the individual rate instead of the corporate rate.
Richardson said a majority of businesses in Lawrence County are “pass-through” businesses.
Toomey said American manufacturers already pay the highest business tax rate in the world at 35 percent. Obama’s policies will make it harder for manufacturers to create jobs and compete with their foreign competitors, he added.
Richardson Cooling Packages manufactures complete cooling system packages for industrial equipment engines. It has its manufacturing plant on Moravia Street and final assembly and distribution facility on New Butler Road.
The company was founded in 2002 and has grown from two employees to about 70 as the result of investing $4 million to $5 million in its operation, Richardson said.
The firm had been doing all of its manufacturing in Turkey, he said, but a change in the U.S. tax code improved the business climate.
As a result, the company “started to move some of this work back,” Richardson said.
All the profit that is made stays with the company, he added.
“The more that you funnel back to the government, the less profit you have. We need to make a fair profit.”
Richardson said he would experience a 7 percent tax increase as a result of the expiration of the Bush tax cuts at the end of the year plus tax increases through the Affordable Care Act.
The marginal tax rate for him would increase from 35 percent to 39.6 percent, he said.
That would cut into the company’s profits and would have to be made up somewhere, Richardson said, asking,
“Do we cut (employees) or raise our prices?”
Richardson said a cut in profits would reduce working capital, which the company needs to continue to grow and remain competitive.
(Email: jmanna@ncnewsonline.com)
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The head of a New Castle firm said President Obama’s tax policies would have a negative effect on his business. AP
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