AFPM President Charles T. Drevna said, ‘while we understand it is very difficult to develop a tax reform plan and we appreciate Chairman Camp’s efforts, this proposal is not a step toward a progrowth economic tax policy. The chairman should not consider any tax reform packages that makes US manufacturers less competitive. This plan could unintentionally act as a tax increase at a time when American manufacturing is beginning to become globally competitive after decade of losing jobs overseas.
‘The extension of depreciation schedules and the repeal of the manufacturing tax deduction in Chairman Camp’s draft will hurt domestic investments. Furthermore, we seriously question retroactively repealing commonly used accounting practices to finance tax reform. Accelerated depreciation, the manufacturing tax deduction and last in first out (LIFO) are critical deductions that all domestic manufacturers use to help recover costs and replace inventories. Such deductions also ensure American manufacturers remain competitive in a global marketplace. The elimination of these deductions will increase the cost of capital for many US business owners and result in less capital investment and fewer available jobs.
‘Although Chairman Camp’s intent was to make the tax code tax simpler and fairer and to level the playing field, he unfortunately missed the mark. To date, the tax reform debate has been fixated on a one size fits all approach of lowering the corporate rate to a certain percentage across the board, while eliminating various existing deductions. We urge Congress to take a comprehensive look at how different tax structures impact different sector of the economy and use such analysis to develop a comprehensive tax reform. A different approach may be needed to advance tax reform for the capital intensive manufacturing sector than that would be fair for the capital intensive manufacturing sector than what would be fair for the service sector or web based business. A one size fits all approach to taxing corporate America is not the answer and will result in many industries spending more on taxes and less on salaries, the exact opposite goal Chairman Camp looks to accomplish. We look forward to working with Congress to create a progrowth tax code that doesn’t pick winners or losers.’
Adapted from a press release by Claira Lloyd.
Read the article online at: https://www.oilfieldtechnology.com/exploration/27022014/afpm_on_tax_reform_plan206/