U.S. manufacturing companies split on how much they are willing to give up in tax breaks

Article by Christian A., on July 21, 2012

The tax directors of large U.S. manufacturing companies are not unanimous on the value of the tax breaks they would need to sacrifice in order to achieve a lower corporate rate. The executives from Ford Motor Co., 3M, Corning and Air Liquide SA are set to testify at a hearing of the House Ways and Means Committee in Washington. Diane Dossin, chief tax officer at Ford, said that it’s not yet time to select the ones that remain from the ones that have to be removed.

He said that the low rate is the “single most important thing” for Ford’s business to continue to move forward in the U.S. A proposal was made by representative Dave Camp, who also serves as the panel's chairman, to cut the top U.S. corporate tax rate to 25% from 35%. The Michigan Republican hasn't said just how much he wants to make up for the lost revenue.

Compared to the other countries in the industrialized world, the U.S. has the highest statutory corporate tax rate. After considering tax breaks, the effective rate is similar to that of other large countries. According to Henry Gjersdal, vice president of tax and real estate at 3M, the producer of Scotch tape would be willing to give up tax breaks for domestic manufacturing, hastened depreciation and corporate research to get the rate down to 25%.

Dossin said the lawmakers will have to estimate the full impact of the full effects of rate reduction and of revising the tax base as they make these decisions. She said that the base broadening comes with costs that must be compared with the lower rate.

Susan Ford, a vice president at Corning, said that the U.S. tax incentive for corporate research is not competitive, she noted that typically, Asian countries will have to offer major incentives that make overseas investment appealing. She said that when the corporate tax are lowered, it becomes less probable that the companies offer incentives to shift the income offshore. [source: Bloomberg]

Topics: united states

If you liked the article, share on:

Comments

Recommended

New and improved 2018 Subaru Legacy comes packed with a number of upgraded features from the get go - from the exterior to the interior. And the company has finally...
by - June 23, 2017
In an interview involving Lamborghini CEO Stefano Domenicali and Automotive News, the topic about the Urus was thoroughly discussed. This super SUV is scheduled to make its debut later this...
by - June 23, 2017
Porsche definitely adores variety. You’ll see what we mean if you browse through the official company's website that shows a plethora of various 911 models. And now, the German marque...
by - June 23, 2017
2018 Ford Expedition is on its way to the market, and will be arriving at dealerships this fall. The all-new SUV will come with a new design, new EcoBoost engine,...
by - June 23, 2017
The 2018 Porsche 911 GT2 RS that made its debut not so long ago at the E3 video game expo in Los Angeles has already been sold out according to...
by - June 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries