bake - February 2018 - 16

equipment innovations

Tax Overhaul Opens Doors
Passage of the largest tax overhaul the United States has seen
in more than 30 years will bring many opportunities to the baking industry, says Robb MacKie, president and chief executive
officer of the American Bakers Association (ABA). The 2017 Tax
Cuts and Jobs Act includes lower tax rates and temporary relief
for capital expenditures for American businesses.
The greatest benefit the bill offers is a reduced corporate tax
rate, lowering from 35% to 21%. MacKie noted the change will
unleash unprecedented growth within the industry, allowing
bakers to pursue endeavors they were previously reluctant to
dive into.

"Coupled with the rollback
of the regulatory overreach
of the past few years, bakers
and their suppliers have more
capital and flexibility
to modernize facilities."
Robb MacKie, president and chief executive officer of the
American Bakers Association

"After a decade of piecemeal, stop-gap tax changes, bakers
now have the clarity and consistency necessary to implement

allowed to immediately deduct the cost of short-lived capital

long-term sustainable growth strategies," MacKie says.

investments such as equipment or facility upgrades. However,
this provision will last only five years and then be phased out in

The lowered rate and increased flow of capital will give bakers

the subsequent five years, pushing bakers to enhance opera-

the chance to invest in facilities, equipment and research. It has

tions before it's too late.

the potential to drive innovation in an industry that has faced
flat consumption for years.

The bill also preserved the research and development tax
credit that allows companies to write off investments made on

It also will enable companies to allocate more resources toward

developing American-made products.

ingly competitive market, baking companies will be able to im-

While the long-term effects of the reform are yet to be seen,

prove their workforce through cutting-edge training and create

the bill provides the industry with a generous start to 2018.

incentives that attract skilled employees.

With so much room for investment, it is now up to the industry
to take advantage of the new breaks, MacKie noted. 

Compared to other developed nations, U.S. businesses have faced
some of the highest corporate tax rates globally. MacKie said the

"Coupled with the rollback of the regulatory overreach of the

lowered rate will level the playing field and allow the United States

past few years, bakers and their suppliers have more capital

to be competitive with other international businesses. 

and flexibility to modernize facilities, meet new consumer
trends and add skilled employees," MacKie said. "Now the big-

Capital spending provisions are another key component set

gest challenge facing bakers will be finding and training those

to impact the industry. Beginning in 2018, companies will be

skilled employees to sustain their growth plans." 

16 < FEB 2018 | bakemag.com

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Table of Contents for the Digital Edition of bake - February 2018

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