Federal tax policy must keep corporate tax rates low, end double taxation and encourage research and development so U.S. chemistry industry companies can innovate, create jobs and compete globally.
Many chemistry companies operate in multiple countries and make decisions every day about where to site facilities and grow their businesses. Existing tax policy punishes U.S. manufacturers by taxing income from earnings abroad—after those earning already have been taxed by the host country. This double taxation puts U.S. companies at a competitive disadvantage.
ACC’s Policy Position
Federal tax policy must minimize cost and reduce complexity, and any changes to the tax code must be fair and promote U.S. competitiveness.
Low corporate tax rates are critical to allowing American chemistry companies and other manufacturers to compete effectively in global markets.
Ending double taxation of foreign subsidiaries of U.S. companies would help level the global playing field and keep chemistry production and jobs here at home. Two approaches would help: defer or eliminate taxes on the foreign operating income of foreign subsidiaries of U.S. companies, or fully credit U.S. companies for the taxes they pay to foreign governments for earnings in those countries.
ACC supports current or liberalized tax rules on deductibility of intercompany debt. The funds generated by the deduction are used to capitalize U.S. subsidiaries of foreign companies. Removing or lessening this deduction would reduce capital investment and job creation in the United States.
To help promote innovation in the business of chemistry and overall U.S. manufacturing, tax policy must advance research and development and protect America’s intellectual and technological capital.