Paper and wood product manufacturers commend Congress and the administration for adopting comprehensive tax reform that encourages economic growth, job creation and the competitiveness of all U.S. businesses. Central to the new tax system is a low corporate tax rate, support for investment in U.S. manufacturing and its global supply chain and an international tax system that reflects a globally competitive territorial tax system.
The U.S. forest products industry — made up of both C-corporations and pass-through entities — is a significant contributor to the U.S. economy, employing nearly 900,000 men and women in above-average wage jobs, investing heavily in equipment and improvements and exporting products throughout the world. The industry produces more than $200 billion in paper and wood products annually and accounts for approximately four percent of the total U.S. manufacturing GDP.
Our industry also supports jobs in other sectors of the U.S. economy. A recent study conducted by the Economic Policy Institute found that each paper industry job supports 3.25 jobs in supplier industries and in local communities as the result of re-spending and tax receipts.
We are highly capital-intensive and have made significant investments and facility upgrades in recent years. According to the Annual Survey of Manufacturers, in 2015 the paper and wood products industry invested $12 billion in plant and equipment. Items such as recovery boilers, turbine generators, paper machines and environmental controls are critical to maintaining technologically advanced manufacturing facilities that compete in an extremely competitive global marketplace.
As the Internal Revenue Service and Department of Treasury begin implementation of tax reform, AF&PA will focus on appropriate rules related to expensing of capital equipment, interest expense, research and development and international tax policies.