Coal CEO: Senate Tax Plan 'wipes us out'
CNN/Stylemagazine.com Newswire | 12/6/2017, 6:12 a.m.
(CNN Money) -- Coal CEO Robert Murray warns that if the Senate version of tax reform is enacted by President Trump he'll be destroying thousands of coal mining jobs in the process.
"We won't have enough cash flow to exist. It wipes us out," Murray told CNNMoney in an interview on Tuesday.
Murray, a fierce supporter of Trump's efforts to revive coal, condemned the Senate bill as a "mockery" that would inflict a devastating tax hike on beleaguered coal mining firms as well as other capital-intensive companies.
"This wipes out everything that President Trump has done for coal," said Murray, the CEO of Murray Energy, one of America's largest coal companies.
The tax bill the Senate passed last week would help companies by lowering the corporate tax rate, but it also eliminates some tax breaks.
For coal companies, it could be a double-whammy. It would preserve the Alternative Minimum Tax (AMT) and impose new limits on the interest payments that businesses can write off. Murray Energy estimates that these changes would raise its tax bill by $60 million per year.
The House bill eliminates the AMT, something that would save Murray Energy and other companies money. The AMT prevents companies from claiming so many tax credits and deductions that they owe Uncle Sam nothing at all.
Like other coal companies, Murray Energy borrows heavily to pay for its expensive mining operations. The Senate bill would cap the amount of interest payments that can be written off to 30% of a company's income.
Auto dealers would also have been harmed by the Senate bill's interest deduction cap. But, after fierce lobbying from auto dealers, the Senate made a last-minute change to the legislation that exempts them from the interest deduction cap.
Related: Senate bill would allow oil drilling in Alaskan refuge
Murray declined to say if he shared his concerns with Trump, who has promised to "put our coal miners back to work" by reducing environmental regulations. Trump attended a West Virginia fundraiser hosted by Murray in June 2016.
"I know he cares about the coal miners and their jobs," Murray said.
Murray warned that a bankruptcy of his Ohio-based company would hurt its 5,500 employees along with their families. Asked if other coal mining companies could go out of business, he said: "Most certainly."
Roughly half of American coal jobs have disappeared since the end of 2011 amid a wave of coal bankruptcies, according to a Columbia University study. The research found that coal's decline has been mostly caused by an abundance of cheap natural gas that has led power plants to switch away from coal. Regulation, which Trump commonly blames for coal's troubles, also hurt coal but not by as much as natural gas.
More recently, the coal industry has been pressured by declining costs for renewable energy like solar and wind.
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Murray's comments about the tax overhaul are not the first time he's made dire predictions about his own business.