Boeing, aerospace
manufacturers back U.S. tax overhaul
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[March 14, 2017]
SEATTLE
(Reuters) - Boeing Co and about 90 other aerospace companies are urging
Congress to overhaul the U.S. tax system, saying a set of changes
Republicans proposed last year - including a big cut in the corporate
tax rate - will make them more competitive globally and help create U.S.
jobs.
Boeing Chief Executive Dennis Muilenburg was among those who signed a
letter to Republican and Democratic leaders in the U.S. House and Senate
that was dated Friday and due to be released publicly on Tuesday,
according to the Aerospace Industries Association (AIA).
The support comes as congressional Republicans are developing measures
to alter the U.S. tax system, a task they plan to tackle after
addressing healthcare, according to several people familiar with the
matter.
"We urge you to enact legislation that modernizes our tax system, allows
America's businesses to better compete in the global marketplace and
encourages job creation and innovation in the United States," said the
AIA letter, also signed by the group's CEO, David Melcher.
The changes are based on a "blueprint" released in June by House Ways
and Means Committee Chairman Kevin Brady, a Texas Republican.
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Among its key elements, Brady's proposal would cut the U.S. corporate
tax rate to 20 percent from 35 percent, permit immediate deductions for
capital investment and introduce a border adjustment tax system that
would tax imports into the United States but not tax revenue generated
by exports out of the country.
The push on taxes by aerospace companies comes as they face some
uncertainty under the administration of Donald Trump.
The new president lost no time in publicly pressing Boeing and Lockheed
Martin Corp <LMT.N> to lower costs on planes bought by the U.S.
government. As they source parts and sell many of their products
overseas, aerospace companies also stand to suffer if Trump's aggressive
trade policies cause friction with other countries.
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![](../images/031417pics/busine63.jpg)
U.S. President Donald Trump greets Boeing Chairman, President and
CEO Dennis Muilenburg during a ceremony celebrating the rollout of
the Boeing 787-10 Dreamliner at the Boeing South Carolina plant in
North Charleston, South Carolina, U.S. February 17, 2017.
REUTERS/Randall Hill
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At the same time, Trump has voiced support for the tax reform plan,
including an export-boosting border adjustment tax..
Drafters of the plan say a tax on imports would increase the value of
the dollar, helping offset the cost of imports to U.S. manufacturers by
giving them more purchasing power. A stronger dollar would, however,
make U.S. goods more expensive for foreign buyers.
Boeing's Muilenburg is acting AIA chairman and was joined in signing the
letter by Raytheon Co CEO and AIA vice chairman Thomas Kennedy.
Other companies involved in aerospace manufacturing also signed,
including Lockheed Martin, General Electric Co, Northrop Grumman Corp ,
Honeywell International Inc, Rockwell Collins Inc, Rolls-Royce Holdings
Plc, General Dynamics Corp, Harris Corp, International Business Machines
Corp and L3 Technologies Inc.
The signatures were gathered at a supplier meeting in Seattle last week,
Boeing said. AIA said it has more than 330 members.
(Reporting by Alwyn Scott; Editing by Bill Rigby)
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