Tax
Background
The U.S. tax code puts the forest products industry at a distinct disadvantage against international competition. Significant reform of the U.S. tax system, leading to a lower tax burden, is necessary for the U.S. forest products industry to better compete in the global marketplace.
Policy
AF&PA-commissioned research conducted in 2005 shows that U.S. forest products companies face the highest tax burden among the eight major international competitor countries. Specifically, U.S. income taxes on investment in paper manufacturing is the second highest of competing nations. For corporate forestry, the results are similar — the U.S has the second highest effective tax rate among our competitors. High income taxes on investment correlate with job loss. To address this competitive disadvantage on behalf of the U.S. forest products industry, AF&PA advocates a tax competitiveness agenda, which, among other things, includes the following proposals (listed in no particular order of importance):
- Significant reduction in the corporate tax rate
- Permanent reduction in the tax rate on timber held by all entities and modernizing the rules for Timber REITs
- Repeal or significantly reform the Corporate Alternative Minimum Tax and the individual Alternative Minimum Tax
- Permanent 15 percent tax rate on individual capital gains and dividends
- Repeal or permanently and significantly reduce the federal estate tax
- Reform the biomass tax credit to make it more beneficial to the industry
- Allow our companies to, once again, issue tax-exempt bonds to finance recycling facilities
- Improve international tax rules, so as to avoid double taxation of income
- Protect against general/industry specific tax increases