SUMMARY TO RESPONSES FROM SELECTED MEMBERS The DISC tax deferral has had a significant effect on our ability to compete in both domestic and export (We do not manufacture but resale items purchased from others.) The loss of tax deferral is very important We exported about $9,000,000 in 1974 providing jobs for 300 persons. Of our exports, $2,700,000 could be We can get along without DISC but it gives us a good reason to push our export sales. The cancellation of this tax benefit would force an increase in price which makes us less competitive with products produced abroad with all the adverse economic results that this brings about. Payment of presently deferred federal income taxes would postpone future capital expansion. Current market demand is high and DISC benefits more important in falling as opposed to rising or high level COMMENTS CONTINUED: export markets. Decrease in demand can be expected and DISC provisions will be necessary if we are to With a shift to more foreign manufacturing, there would probably be an increase in jobs in our foreign plant and a decrease in the U.S. DISC has enabled the company to maintain a competitive edge in international markets and to increase DISC has been a substantial incentive for our company to increase our export sales and thereby contribute to U.S. balance of payments. Because of complications of foreign business, about the only profit is on DISC benefit. It is hard to believe that with the high unemployment rate and the wide disparity between exports and imports, that anyone could consider cancellation of DISC. The death of the DISC would definitely deter our export sales. 14/ Most of our work is subcontracted, so the indirect effect on the employment levels of our domestic 15/ See attached booklet from Hercules, Inc. HERCULES INVESTMENTS OVERSEAS... CREATE JOBS HERE AT HOME The history of Hercules around the world shows clearly that our overseas investments create a "pull" effect on exports from this country, thereby saving and creating jobs in the U. S. To see why, let's look back to 1960 when we first began investing abroad. Hercules has exported since the 1920s, but by the 1950s increasing overseas competition, as well as more export incentives given our overseas competitors by their governments, was making our products noncompetitive. We had to invest overseas, not only in sales offices and warehouses but also in plants, or else lose many of our overseas markets. The choice was not between exporting or manufacturing overseas; it was between manufacturing overseas or losing our markets. Shortly after we began investing overseas, our exports and our contributions to balance of trade-surged upward. What was happening was this: the presence of Hercules in a foreign country made us an accepted part of the economic life of that country. Our sales and service force for our overseas plants found markets our domestic plants were unaware of-markets for Hercules products made in and exported from our U. S. plants. Hercules' investment overseas has helped us in this country through: • Stimulating more exports from our U. S. plants • Creating jobs to make those exports • Allowing us to stay competitive worldwide • Boosting our contribution to the U. S. balance of trade 1 |