Manufacturers are paying more in taxes than the service sector, according to the Manufacturers Alliance. "Manufacturers still pay 36.8% of all private business income in taxes, compared to 31.8% for the services sector," said Thomas Duesterberg, president of the Manufacturers Alliance. "The marginal rate for manufacturers too is higher, 52% for manufacturing compared to 43% for services. One reason for that gap is that manufacturing is still more capital intensive that services. At least since World War II the capital has been more highly taxed than labor, and this difference helps to explain the growth of services sector compared to manufacturing."
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