February 22, 2017
By Alex Keown, BioSpace.com Breaking News Staff
WASHINGTON – Chief executive officers from more 16 large manufacturing companies, including pharma leaders from Celgene , Dow Chemical , Eli Lilly , Merck and Pfizer , penned a letter to Congressional leaders in support of a Republican-backed tax reform plan.
Dubbing themselves the American Made Coalition, the industry leaders said reforming the nation’s “outdated tax code” will spur economic growth. In the letter, the manufacturers said the current tax code penalizes U.S.-based companies because it taxes business income on a worldwide basis. By implementing the reforms, the CEOs said the plan would result in higher wages and “roughly 1.7 million new jobs here at home.” The CEOs decried the current tax plan which they said penalizes American workers who make products sold abroad, while favoring international competitors.
In their letter, the business leaders said the plan championed by House Speaker Paul Ryan, a Wisconsin Republican, and Rep. Kevin Brady, a Texas Republican who chairs the House Ways and Means Committee, would lower tax rates and allow companies to “free-up much needed capital” for companies to invest in U.S. manufacturing—something that President Donald Trump has championed. The leaders also said implementing the tax plan would stop corporate inversions that see U.S.-based companies take corporate residence in countries with lower tax rates.
“Incremental tweaks will not level the playing field for American workers or dramatically reinvigorate economy growth,” the letter said.
While the manufacturing leaders were behind the tax proposal, retail leaders have rejected the plan, saying the included provision to “ensure goods and services made abroad face the same tax burden as goods produced in the U.S.,” as the coalition letter says, would raise the costs of goods sold in places like Target or Best Buy, which means prices for American consumers will increase, CNBC reported. Those business leaders established their own lobbying group, the Coalition for Affordable Products, CNBC said.
During a meeting with pharma leaders last month, Trump called on the CEOs of that industry to manufacture more drugs in the U.S. as a way to increase jobs. Trump has called for cutting the corporate tax rate in the U.S. to 15 percent, while imposing stiff tariffs on imported goods, CNBC said. In January, Leonard Schleifer, chief executive officer of Regeneron , told the Washington Post that favorable fiscal and tax policies could make a difference.
While the House plan has the support of manufacturing leaders, which also includes the leadership of companies like Boeing, Caterpillar and GE, CNBC noted that it has received a “lukewarm reception” in the U.S. Senate.
