Tax
Background
The U.S. tax code puts the forest products industry at a distinct disadvantage against international competition. According to a recent report by the National Association of Manufacturers (NAM), the average corporate tax rate among countries in the Organization for Economic Cooperation and Development (OECD) has fallen from 47% in 1981 to 26.3% in 2009. Yet for nearly 20 years, the U.S. tax rate has remained at roughly 40%. As a result, the U.S. currently has the second highest statutory corporate tax rate (combined federal and state) among the major industrial countries in the OECD. Japan is expected to lower its rate by five percentage points in near future. This will elevate the United States to the country with the highest corporate tax rate among OECD nations.
AF&PA believes that significant reform of the U.S. tax system, leading to a more equitable tax burden, is necessary for the U.S. forest products industry to better compete in the global marketplace.
Policy
Excessively high income taxes on business investment correlate directly with job loss and discourage economic-boosting investments. To address this competitive disadvantage and to protect and preserve jobs within this vital American industry, AF&PA advocates a tax competitiveness agenda which should include the following proposals:
- Maintain Section 199 Domestic Manufacturing Deduction.
- Maintain 15 percent rate on corporate dividends and individual capital gains.
- Reform energy tax credits to make them more equitable.
- Allow the issuance of tax-exempt bonds by recycling facilities.
- Promote tax policies that encourage adequate supply of forest resources.
- Repeal or significantly reform the Alternative Minimum Tax.
- Improve international tax rules, so as to avoid double taxation of income.
- Reform pension funding rules.
AF&PA and our member companies will continue to work for a fair and equitable tax structure to ensure the future global competitiveness of U.S. forest products manufacturing facilities and the 900,000 jobs they supports in thousands of communities across America.