Aerospace, semiconductor groups back House GOP tax plan

Aerospace, semiconductor groups back House GOP tax plan
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Groups representing the aerospace and semiconductor industries are now backing the House Republicans' tax-reform blueprint.

The support from the Aerospace Industries Association of America (AIA) and the Semiconductor Industry Association (SIA) gives a boost to the "Better Way" tax blueprint, which has drawn concerns from retailers and many Republican senators.

"The United States needs a modern system which creates a level playing field with the rest of the world in order to locate jobs, manufacturing, and profits inside the United States," the aerospace group said in a recent letter to congressional leaders. "We believe that these are the principles which drive the Better Way tax blueprint being discussed in the United States House of Representatives."

The House GOP tax plan, released in June, is serving as the basis for legislation that the House Ways and Means Committee is developing. But some lawmakers and businesses have pushed back against a key part of the plan, known as border adjustment.

The border-adjustment proposal would subject imports to U.S. taxes while exempting exports. Supporters of the proposal say it would end an advantage that foreign-made goods currently have over American-made goods. Opponents, meanwhile, say that the higher taxes on imports would lead to higher prices for consumers.

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AIA noted that it supports the proposal and the positions of a pro-border adjustment group called the American Made Coalition. AIA said it is made up of more than 330 companies in aerospace and defense (A&D) sector, which is "the second largest gross exporter among major U.S. industries."

"American A&D companies are facing increasing competition from international companies who have benefited from modernized tax systems while the U.S. has stood still," the group said.

The group's letter was signed by its leaders and more than 100 representatives of its member companies. A number of the signers were from Boeing, which is also a member of the American Made Coalition.

The semiconductor group's statement did not specifically mention the border-adjustment proposal but said it believed the House GOP tax plan would help boost domestic jobs.

“The ‘Better Way’ corporate tax reform blueprint would make America’s corporate tax system more competitive and allow U.S. semiconductor companies to grow, innovate, and create more jobs here in the United States,” SIA President and CEO John Neuffer said in a statement Tuesday. “While there are many details of significance to our industry that need to be understood and addressed, we support the proposal as a framework for moving forward with tax reform."

“We recognize the debate is just getting underway," Neuffer added. "SIA intends to work closely with Congress and the Administration to pass corporate tax reform to improve the competitiveness of the United States as a location for semiconductor research, design, manufacturing, and export.” 

SIA's members include Intel, IBM and Texas Instruments.