Western Shower Door, Inc.
Fremont, California  94538
July 9, 2002

Honorable James McCrery
House Ways and Means Committee
Chairman, Subcommittee on Select Revenue Measures

Subject: International Taxation/Tax Inversion

Dear Chairman McCrery:

Thank you for holding your Subcommittee’s meeting today on tax inversion.  It is an important topic for both big as well as small companies, their employees, the long-term competitiveness of the U.S. economy and the ownership of companies throughout our Great Republic.

Western Shower Door, Inc. (“WSD”) is a small/medium-size company.  We employ approximately 220 workers in California and Nevada.

WSD is an integrated manufacturer/distributor/specialty subcontractor to the builder-direct marketplace.   This is a highly competitive business with thin profit margins.

We have been in business for 43 years.  We always pay our taxes.  We are not looking for any special treatment.

Due to the pressure by the homebuilders and general contractors to keep our prices low, we have had to increasingly import more and more raw materials and finished goods, which we manufacture and sell on an installed basis using U.S. workers.  As a result, a larger percentage of our profit is coming from overseas procurement rather what is actually being produced in the U.S.

However, we do not think it is fair for the U.S. to tax us on the “profit” between the price of domestic and lower-priced international goods.  This “profit” is often generated when we have to go further into debt to pay for such goods often before they arrive at U.S. ports.

We live in fear of foreign competitors.  Such a competitor could buy its goods overseas through a foreign company and then legitimately transfer the goods at U.S. prices.  Hence, it would have no “profit” on this segment of its business.  However, it would have a significant competitive advantage over wholly owned U.S. companies, which are forced to pay U.S. taxes on such “profits”.

We would prefer to remain a wholly owned U.S. company.  However, we believe we should be allowed the same tax freedom as any foreign competitor.

Again, we are not asking for any special favors.  Just give us a level-playing field against foreign competitors.

If Congress can’t do that, then don’t prohibit us from acting like our foreign competition.  The long-term issue for you and other Members is whether or not you want our sons, daughters and grandchildren working for U.S. companies or foreign companies?

Mr. Jim Easton, who previously worked with Congressman John J. “Jimmy” Duncan as a House Committee Staff Person and also handled Ways and Means Committee issues for Mr. Duncan’s father (Congressman John J. Duncan who was at one time was the Ranking Republican on the House Ways and Means Committee), will be in touch in your staff on behalf on Western Shower Door, Inc. to share our thoughts and ideas on this critical matter.

I look forward to an opportunity for Jim and I to work with your staff as this issue continues to gain the close attention of the Ways and Means Committee and the Congress.

Sincerely,

Craig McCarty
President