Apparently, the President’s Council on Jobs and Competitiveness is proposing a tax break for worker training. At the meeting of the Council with the President on June 13, the group argued that worker training should be treated as a depreciable expense under Section 179 of the tax code. “Currently, equipment can be treated on a deductible basis, but improving our human capital is just as important to the tax code,” Darlene Miller, President and CEO of Permac Industries said (see video below at the 73 minute mark). The tax incentive was part of a discussion on a pilot program to provide workers with manufacturing skills, essentially tying specialized school training and manufacturing internships.
I say apparently because the tax proposal is not yet included in any public documents of the Council and came up at the end of the discussion. There were hints of this in Miller’s comments during the Council’s first meeting (see previous posting). But the documents on the two websites (Jobs Council and White House website on the Council) restrict the worker training discussion to working with community colleges and others to better train manufacturing workers. This is an initiative already supported by the White House. The President spoke before on the importance of community college and spoke earlier this month on the manufacturing skills certificate initiative as part of the Skills for America initiative.
Adding a tax incentive would be a major step forward. As readers of the blog know, I have long advocated a knowledge tax credit (see earlier posting and my recently published “Comment on Cragg and Stiglitz: Invest in Intangible Assets” in The Economists’ Voice. Using Section 179 to provide a tax incentives for worker training would be a way of implementing such a knowledge tax credit. While I realize the Jobs Council brought this up as tied to a specific pilot manufacturing training program, I urge the Administration to look at is more broadly as well.
For those interested in the details, there are two different websites for the Council. The Jobs Council website has documents on the “framing” document and an idea fact sheet outlining what was to be presented to the President as the June 13 meeting (as well as an a link to the Jeff Immelt and Ken Chenault oped in the Wall Street Journal). The second website is the White House website on the Council. That website’s posting for the June 13 meeting has a copy of the President’s remarks, a link to the White House blog PR type posting, a link back to the Jobs Council website (and documents) and the video of the meeting.