If the Tax Overhaul Smells Fishy, It’s Probably the Samoan Tuna Plant
While partisans squabble over whether the Republican tax overhaul in Congress benefits the middle class or the wealthy, part of the proposed legislation is going over swimmingly in Pago Pago.
The House plan, which would reinstate a tax break for a tuna cannery in American Samoa’s capital, could provide about US$10 million a year to StarKist Co., the territory’s largest private employer.
The credit’s advocates say it is an economic imperative.
American Samoa’s other large cannery closed last year, citing reduced access to fishing grounds. StarKist says it is facing competition from subsidised firms in Thailand and China that pay lower wages. On top of the steady decline in American appetite for canned tuna, the end of the tax credit could tip the scales away from Pago Pago.
“For us to stay in American Samoa, this is very critical,” said Andrew Choe, StarKist’s president and chief executive officer. “This credit does help us to stay competitive.” The American Samoa provision is a rounding error in the U.S. shelf-stable seafood market and the tax bill, but it is an important priority for StarKist and American Samoa’s nonvoting representative, Aumua Amata Radewagen.
Ms. Amata, a Republican, asked Ways and Means Committee Chairman Kevin Brady (R., Texas), to include the credit in his tax bill. He did. A spokeswoman for Mr. Brady said this provision and others for Puerto Rico and the U.S. Virgin Islands “recognise the unique economic circumstances” of the territories.
In addition to netting gains for Samoan tuna, lawmakers have festooned the 450-page House bill and its 515-page Senate counterpart with provisions involving microbreweries, bicycle commuters, orange growers in Florida, volunteer firefighters in Maine and a company that manufactures organic salad dressing.
In broad terms, the legislation seeks to overhaul and streamline the U.S. tax code and make the American economy more competitive. In practice, however, it’s the sort of ambitious, fast-moving policy train that gives individual lawmakers leverage. To win support for the bill, congressional leaders sometimes allow members to hitch their own parochial wagons for the ride. That’s a rare opportunity in the modern Congress, which passes plenty of symbolic measures renaming public buildings but little substantive legislation.
Decorating bills with small giveaways is as old as American democracy, of course, but these additions come at an especially awkward time. Congress is adding a slew of minor tax cuts and exemptions to a bill presented under the banner of tax simplification. “It runs against the purported narrative of the effort,” said Robert Weissman, president of Public Citizen, a consumer advocacy group. The potential extension of the American Samoa Economic Development Credit would help the tuna company’s cannery, where 2,300 workers cook, clean and pack about 5,000 containers filled with Pacific Ocean fish annually. StarKist, owned by South Korea’s Dongwon Industries, saw its targeted tax break lapse in 2016. The House bill would revive the credit and extend it through 2022.