House panel hears testimony about how tax law impacts energy sector
Representatives from the energy sector testified before the U.S. House Energy and Commerce Subcommittee on Energy on Wednesday about how the tax reform bill will fuel investments in facilities, infrastructure, nuclear power generation and workforce.
Sam McCammon, president of Illinois-based Anamet Electrical, Inc., testified that the Tax Cuts and Jobs Act of 2017 has enabled the company to increase employee wages 3 percent, to invest in new equipment that opens up new bulk transfer hose and exhaust hose markets, and to make a “significant investment” in a new nuclear power generation Sealtite product.
McCammon cited a recent survey that found 53 percent of electrical manufacturers report the tax reform bill has “already had a net positive impact on their business.” He also noted that one in three electrical manufacturers surveyed said tax cuts had already allowed them to invest in employees, equipment, and research and development.
“ANAMET Electrical Inc. and many other electrical manufacturers support the Tax Cuts and Jobs Act, and businesses like mine are already reaping the benefits,” McCammon said. “However, there are changes to the law that should be made for the full potential to be realized, including fixing the qualified improvement property error (QIP), and additional guidance on base erosion anti-abuse tax (BEAT), and global intangible low-taxed income.”
McCammon said the tax law mistakenly assigns a 39-year depreciation schedule for QIP investments in non-residential projects rather than the intended 15-year schedule. He also testified that electrical manufacturers had requested clarification on what qualifies as a BEAT payment.
Tom Ferguson, CEO of Texas-based electrical equipment manufacturer AZZ, Inc., testified that American manufacturers were on common ground with global competitors for the first time in decades under the tax law.
“So we’re now competitive and we’re much more confident, so we’re growing,” Ferguson said. “A lot of our European competitors because of their tax rates they’ve been able to invest more aggressively in advanced machinery. So now we’re doing that. We’re upgrading our technology in plants like in Richland as well as in most of our electrical systems plants too. We’re able to do a lot more training because we got the cash savings.”
U.S. Rep. Fred Upton (R-MI), chairman of the Subcommittee on Energy, said the tax law has resulted in “widespread economic benefits, providing tangible relief for American workers and their families.”
“The savings resulting from tax reform is now beginning to reinvigorate our national economy, and a renewed confidence and lower cost of doing business is resulting in bigger paychecks, more jobs, and more benefits,” Upton continued. “This is not just political rhetoric — we are actually seeing the benefits of tax reform across the United States economy.”
