Manufacturers lobby against Obama tax plan
WASHINGTON (Reuters) - Major U.S. manufacturing companies, including 3M Co and Ingersoll-Rand Co Ltd, lobbied U.S. lawmakers this week to hold back tax law changes proposed by President Barack Obama.
More than 300 executives of the National Association of Manufacturers met more than 100 lawmakers and staff on Capitol Hill, to persuade lawmakers to oppose Obama's tax proposals that many companies say will hamper their competitiveness in global markets.
"The rhetorical battle is really against us," John Engler, former governor of Michigan and president of NAM, told a briefing for reporters in Washington on Thursday.
The business community is fighting a "this is raising taxes on people who ship jobs overseas" argument, he said.
Obama, carrying out a campaign promise, intends to raise $210 billion over 10 years by revising a tax policy that lets companies defer income earned abroad and by closing what he calls a loophole that allows companies to hide income from foreign subsidiaries.
Multinational companies see the tax changes as one of their biggest lobbying fights this year.
The United States has among the highest statutory corporate tax rates in the industrialized world, with a top marginal rate of 35 percent, a fact long emphasized by businesses.
In "most of our markets, what we're dealing with is the competitor is headquartered in Asia Pacific or parts of Europe and, obviously, they have a different tax structure than you would as a U.S.-based company," Ingersoll-Rand chief executive Herbert Henkel said.
But the administration argues the rate is the wrong number to look at, because the actual rate after deductions and loopholes puts the United States roughly in line with its developed-country peers.
The administration says that, of $700 billion in overseas earnings from U.S. global companies in 2004, companies paid just $16 billion in taxes, a rate of 2.3 percent.
3M senior vice president John Woodworth said his company is paying very close to the statutory rate, at 31 percent. He said the trip was his first to Washington in 35 years at 3M.
"It feels anti-business for sure," Woodworth said. "I think that is a huge mistake."
House of Representatives Ways and Means Committee chairman Charlie Rangel proposed similar changes in 2007, but he paired it with lowering overall tax rates.
"In my meetings, I did not perceive an appetite to take a thorough look at the entire tax structure," Mike Campbell, chairman of NAM and president of Arch Chemicals Inc, said on Thursday.
He said he got "sympathy but no appetite" to take on broad tax reform.
The companies also addressed climate change legislation, trade and a bill that would make it easier for unions to organize.
(Reporting by Kim Dixon; Editing by Tim Dobbyn and Andre Grenon)
