ACA Policy Statement on Tax Reform and Federal Budget
The American Coatings Association (ACA) represents the $20 billion dollar paint and coatings industry in the United States, operating in all 50 states, and employing over 250,000 people engaged in the manufacture and distribution of its products. U.S. manufacturers face higher tax costs than almost all of our competitors in other countries. The corporate tax rate in America is the highest among developed nations. The current tax system has created an uncertain environment that consistently undermines our manufacturers’ ability to compete and succeed in the global marketplace.
Tax extenders passed at the end of the 113th Congress provided a short-term fix for a number of important provisions affecting manufacturers, but these extenders are not a solution going forward, since they already expired at the end of 2014. This exemplifies the problems inherent in corporate taxation on an ad hoc basis. Policymakers must act to create a tax climate that encourages innovation and spurs investment, job creation and economic growth. Key ingredients for comprehensive tax reform plan include:
- A lower Corporate Tax rate;
- Equitable treatment of small businesses filing under Subchapter S of the tax code in areas such as expensing of certain investments;
- Encouraging investment by making permanent a competitive R&D tax credit;
- A modern International Tax system that does not contain disincentives to U.S.-based manufacturing; and
- A robust Capital Cost-Recovery system.
Manufacturers are also concerned about the impact of historically high levels of the federal deficit and the debt on the overall U.S. economy, but simultaneously want to ensure that there are no more government shutdowns and no more threats of default. The nation is once again poised to reach its borrowing limit in 2015, and the path towards raising the debt ceiling is unclear. ACA urges Congress to pass a balanced budget while continuing to meets its current obligations.