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If Tax Overhaul Smells Fishy, It’s Probably the Samoan Tuna Plant

WASHINGTON—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 city, could provide about $10 million a year to StarKist Co., the territory’s largest private employer.

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.

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.

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 subsidized 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 “recognize the unique economic circumstances” of the territories.

Read more at Wall Street Journal