Posted May 01, 2018 06:28:16Industrial power companies like Southern Co. are not exactly the most hated groups in America, but the Trump Administration has shown no interest in addressing their concerns.
That is despite the fact that they are responsible for about 50 percent of the U.S. industrial sector’s economic activity.
The industry employs more than 12 million Americans and is responsible for nearly $1 trillion in revenue.
In 2020, Southern Co.’s revenue from electricity generation and distribution totaled $8.6 billion.
That includes the value of the tax breaks the Trump regime offers.
According to the Tax Policy Center, the industrial power sector has made $3.3 trillion in profits in the last four years.
The Trump administration is currently trying to eliminate the corporate income tax as part of its tax overhaul, which has also been passed by the House and Senate.
Under the Republican plan, companies would pay an effective rate of 15 percent instead of 35 percent.
The tax plan would also eliminate the alternative minimum tax, which would apply to some $500 billion in corporate income taxes.
This could leave Southern Co., the nation’s largest industrial power company, with a $2 billion tax bill.
Southern Co.-owned equipment manufacturers such as Siemens and Siemens-owned PowerTech, have already announced their intent to leave the country.
“We believe it is critical that the Trump Tax Cuts do not result in any additional tax on equipment manufacturers or their equipment suppliers, and are actively considering all options available to avoid the additional tax,” the company said in a statement to ABC News.
But even if Southern Co and other manufacturers don’t leave the U, it won’t hurt to keep an eye on the Trump’s tax plan.
The corporate tax cuts may not be enough to get Southern Co out of this mess.
The company is the fifth-largest producer of electricity in the U to leave since Trump took office, according to the U-T Research Center.
The coal industry also has been a major contributor to Southern Co’s revenue, and is likely to remain so.
But the industry’s decision to leave doesn’t mean that the U of A will suddenly start making investments in energy efficiency.
The U of B has been investing in energy storage and solar power, but these technologies are not expected to help the U’s economy anytime soon.
The university is not expecting to get much of a return on its investments in this sector in the next four years, said Professor David Haines, who heads the U B’s energy and resource economics department.
“Our current plans do not include any significant investment in renewables, and if there is no growth in solar or wind power by the end of the decade, the U is not going to be able to sustain its energy investments for a very long time,” he said.
Hainys said the U may also see more economic activity in other industries in the future.
“I think the industrial sector is going to grow,” he added.
But that doesn’t necessarily mean that there won’t be some economic damage from the energy sector leaving.
According a report from the Center for Economic and Policy Research, if Southern’s decision were to continue to be in effect, “the U. S. industrial production and consumption would fall by more than 1.5 percent over the next decade, on average, due to the absence of any other domestic industries that rely heavily on industrial output.”
That would hurt Southern Co if it didn’t make investments in its energy technology, as it has done in recent years.
If it continued to operate at current levels, the company’s revenue could drop by another $5.8 billion.
And that is before the company even sees a reduction in manufacturing jobs, according the report.
So, the industry isn’t in a good position to make any money in the long run, said Hain, adding that there are many other factors that could impact the future of Southern Co, including the impact of climate change.
“The economic impact of the [Trump] tax cut would be felt by a lot of different sectors, and some of them could even be more important to the economy than the industry itself,” he told ABC News, referring to the impact that the tax cuts will have on the energy industry.
Southern has about 1,200 employees in the plant that manufactures electric vehicle charging equipment, but they will likely have to lay off workers in order to move forward with plans to sell the equipment.