17 April 2009 20:34 [Source: ICIS news]
By Ben DuBose
HOUSTON (ICIS news)--The Obama administration’s proposed budget blueprint could be “potentially devastating” to the US chemical and manufacturing sectors by putting them at a disadvantage with global competitors, Eastman Chemical chairman and CEO Brian Ferguson said on Friday.
“When you look at the administration’s proposed budget blueprint in total, you start to see how potentially devastating it could be to the American chemistry and manufacturing sectors, and to the millions of jobs they provide,” ?xml:namespace>
“Politicians have the ability to make their ideas and proposals sound good in theory, but that’s not always the case when they are put into practice,” he added. “Oftentimes they have deep and damaging consequences. It’s important that we make our case heard now before these policy directives become law.”
That analysis evaluated the impacts of taxes including the cap-and-trade proposal, expected switching to alternative fuel sources and the elimination of oil and gas tax incentives.
Additionally, the evaluation included the repeal of the LIFO (last in, first out) inventory accounting method in taxes. Under LIFO, it is assumed that companies sell newest inventory first. Without it, companies could be at risk of skewed pricing evaluations in their tax reports since the cost of a product at the time of a sale could be very different than when it was acquired.
Also, the evaluation included the repeal of rules that allow tax deferral on earnings from foreign operations and the reinstatement of the Superfund environmental clean-up tax on certain chemical feedstocks,
“At the end of the day, manufacturers must be able to compete globally,”
The cap-and-trade proposal, which would tax
“These are additional costs that foreign competitors who import into the
A recent study from the nonpartisan research group Resources for the Future that indicated that as many as 40% of vulnerable industries, including chemical manufacturing, could leave the
“Our country is concerned about energy security and independence,”
“We [as chemical companies] need to let our legislators know that we want to be part of the solution,” he said.
“It’s important that the administration knows that we’re working toward the same objectives of developing a responsible energy policy, creating jobs for Americans, and growing our economy. We just want to find the common ground that will allow us to achieve these goals without compromising the competitiveness of our existing industries.”
To that end, he urged executives throughout the industry to analyse the potential consequences of the proposed budget and its effects on their particular businesses, and then consider if it’s important enough to take action, such as the editorial on the subject
“I think they’ll see that it is,” he said.
“This isn’t about profits. We’re talking about jobs and the long-term viability and competitiveness of the
($1 = €0.76)
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