Washington, DC (PRWEB) February 26, 2014
American Fuel & Petrochemical Manufacturers (AFPM) President Charles T. Drevna responded to the proposal, “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 pro-growth economic tax policy. The chairman should not consider any tax reform package that makes U.S. 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 decades 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 retro-actively 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 U.S. 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 sectors 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 what would be fair for the service sector or web based businesses. 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 pro-growth tax code that doesn’t pick winners or losers.”