Cal Dooley, CEO and president of the American Chemistry Council (ACC), has issued the following statement in response to President Obama’s proposed federal budget:
“If passed, the president’s budget would strike a major blow to America’s chemistry industry, making it harder for us to compete internationally, create jobs, and continue supplying energy-saving products to the U.S. economy. Overall, the proposal is a significant tax increase on U.S. companies already burdened by a corporate tax system that favors foreign competitors. It could erode the chemistry industry’s job base, currently nearly 800,000 strong. Further, it could risk jobs in chemistry’s ‘customer’ industries, if they move abroad to be closer to raw materials or have to pay more to transport them into the U.S.
“From reinstatement of Superfund taxes to ‘double taxation’ of U.S. companies and other levies totaling billions of dollars, this budget will thwart the administration’s stated goals of strengthening manufacturing and doubling U.S. exports in five years. It will harm energy security, too, by discarding tax benefits available to oil and gas companies, leading to higher energy costs for chemical makers and other consumers. Congress should take a pass on these damaging provisions and enact a budget that advances job creation and U.S. competitiveness.
President Obama’s proposed budget includes:
- Reinstatement of Superfund taxes, costing the chemical industry approximately $1.5 billion annually.
- Repeal of the LIFO method of accounting for inventories, with retroactive tax on the chemical industry in the hundreds of millions of dollars, with higher tax cost going forward.
- Deferral of deduction of interest expense allocable to foreign operations, which will have the effect of permanently higher U.S. tax liability. ($37 billion cost to all companies subject to the tax.)
- Tighten rules for calculation of the foreign tax credit so as to make double taxation of foreign earnings even greater. ($51 billion cost to all companies subject to the tax.)
- Eliminate most tax benefits now available to coal, oil, and gas companies, which will raise the cost of energy and feedstocks to ACC member companies. ($59 billion total cost to oil, gas and coal companies, including loss of dual capacity taxpayer status, $10.8 billion, and removal of the domestic manufacturing deduction, $18.2 billion.)”