Congressmen tour Pawcatuck manufacturer; new depreciation measure, trade mission touted
Stonington - Armed with earplugs and plastic glasses, Rep. Joe Courtney, D-Conn., and Rep. Jim Langevin, D-R.I., toured a fiber optics and high-speed copper cable manufacturer in Pawcatuck Monday.
Executives from Cable Components Group pointed out where their wish list equipment would go now that they could expect to pay less in taxes.
Courtney and Langevin have been touring small businesses around their states and said they wanted to reward small businesses that have remained in America during the economic downturn. Within the federal "fiscal cliff" bill passed earlier this month, they approved a bonus depreciation measure, which gave small businesses the ability to deduct the cost of capital equipment from their taxes up front instead of over time through depreciation.
The two also invited Cable Components to come on a trade mission or reap the benefits of Connecticut's Export Assistance Program based in Middletown.
"It's a service to American business, to try and grow foreign customers in other parts of the world," Courtney said.
"We had a good discussion," added Courtney. "One of the first things we talked about was the fact that the bonus depreciation was part of the tax extender package in the fiscal cliff bill, which again protects the ability of companies like this to expense new capital equipment."
The program is run through the U.S. Department of Commerce and works with about 2,500 companies in Connecticut, said Anne Evans, a district director for the commerce department.
Courtney has accompanied businesses on trade missions to the United Kingdom, Belgium and the Middle East.
"When we bring the congressman, that really opens up doors, especially if companies want to do business with governments; it opens up higher-level meetings," she said.
Companies such as AeroCision based in Chester, BNL Industries based in Vernon and Applied Physical Sciences based in Groton, have benefited. Applied Physical Sciences now exports to the Netherlands, Courtney said.
Cable Components executives have their eyes on Europe and South Korea for the time being. They are also interested in working with the federal government and General Dynamics.
The company has 63 employees, more than $20 million in annual sales and sells to 77 companies. Many of customers are Fortune 500 companies and based in the United States. These companies create final products from electric to Internet cable and employee thousands of workers.
"We want to manufacture in the United States, said Cable Components President Charles Glew, "but there are tipping points that create these environments where industries move away."
This is why both congressmen said they were working to create federal tax incentives that encouraged manufacturing to stay or return to the United States.
"We are able to write off most of the depreciation in the first year, and so you have a producing asset for the next seven years, yet you have expensed it in this year so our taxes get reduced as an expense that we spend for capital," Glew said.
"When you have a tax credit that will cover the cost, or part of the cost, of moving your operation overseas, that doesn't make any sense," Langevin said.
"When we are trying to emphasize 'Make it in America,' I would like to see these tax incentives going to companies that are making things right here."
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