PLEASANT GAP - When workers employed by Glenn O. Hawbaker Inc. of Centre County are creating a path for a new highway, they use a system that relies on one satellite-connected leveling point that sends signals that control the height of bulldozer blades.
The money for that costly innovation came from company profits, which will be smaller under President Barack Obama's tax plan, according to officials at a news conference called by U.S. Sen. Pat Toomey, R-Pa., at a company office in Pleasant Gap on Monday.
Obama's plan would raise the marginal tax rate for individuals - and thus for 80 percent of Pennsylvania manufacturers - by 6 percent, to 41 percent, costing the state 31,000 jobs, according to Toomey, author of a report titled "Taxing Manufacturing."
Dan Hawbaker, (right)?president and CEO?of Glenn O. Hawbaker Inc., speaks during a press conference with Sen. Pat Toomey, R-Pa., Monday afternoon near the Pleasant Gap asphalt plant.
The Obama plan would shrink the tax for C corporations by 7 percent, but those are generally the big companies, Toomey said.
"It is dubious to assert that the president's desired tax code is fair when it lowers the rate for large corporations to 28 percent while raising the tax burden borne by small manufacturing companies to 41 percent," Toomey stated in the report.
Toomey's report includes 10 "case studies," including one on Hawbaker.
Toomey panned Obama for too much spending and debt, too many regulations and too much taxation.
The upper-level tax increase would damage business not only by discouraging reinvestment in new equipment, technology and training but also by reducing incentive to launch businesses, because of diminished profits that would make the risk less promising and by making manufacturers less competitive with foreign manufacturers, many of whom pay lower taxes, Toomey said.
He recommended lower "marginal" rates, with the loss of revenues offset by closing loopholes and credits.
The bad economy has already forced the company to reduce reinvestment, including that for training, said company CEO Dan Hawbaker, who is in the process of transitioning to the family's third generation of family ownership.
Asked how much the family pays in taxes, he said "it's in the seven digits."
Hawbaker declined to say how much the company earned in profits in 2011, but he said the Obama increase in marginal rates would reduce his profit - and reinvestment - by about $40,000 for each $1 million in profit.
The Keystone Research Center, also on Monday, released a report that provides a possible counterpoint to Toomey's report.
According to Keystone, manufacturing job growth has been generally better during the seven Democratic presidential administrations since 1948, compared to the nine Republican administrations.
The Democratic administrations have added an average of between 160,000 and 250,000 manufacturing jobs per year, according to Keystone. The Republican ones have lost manufacturing jobs at about the same rate, according to the organization.
Mirror Staff Writer William Kibler is at 949-7038.