8. Income Taxes

Deferred income taxes are provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and those for income tax reporting purposes. Deferred income tax (assets) liabilities relate to:

	2016			2015			2014
Property, plant and equipment	$	6,515,129		$	6,694,885		$	6,503,597
Other		119,618			99,989			92,531
Total deferred income tax liabilities		6,634,747			6,794,874			6,596,128

Other postretirement benefits		(371,460	)		(281,154	)		(1,030,203	)
Inventories		(806,680	)		(807,061	)		(829,876	)
Allowance for doubtful accounts		(124,329	)		(124,351	)		(105,296	)
Intangible assets		(224,609	)		(299,137	)		(396,541	)
Accrued compensation		(233,806	)		(252,297	)		(203,180	)
Pensions		(9,406,224	)		(8,616,582	)		(9,275,949	)
Total deferred income tax assets		(11,167,108	)		(10,380,582	)		(11,841,045	)
Net deferred income tax (assets) liabilities	$	(4,532,361	)	$	(3,585,708	)	$	(5,244,917	)

Income before income taxes consists of:

	2016		2015		2014
Domestic	$	7,276,239	$	4,308,809	$	8,087,552
Foreign		3,947,176		3,712,166		3,441,211
	$	11,223,415	$	8,020,975	$	11,528,763

The provision for income taxes follows:

	2016			2015			2014
Current:
Federal	$	2,554,341		$	1,337,417		$	2,339,917
Foreign		1,091,952			1,054,694			991,257
State		194,514			140,139			295,554
Deferred:
Federal		(339,412	)		(223,530	)		164,830
State		(63,303	)		(14,788	)		75,729
	$	3,438,092		$	2,293,932		$	3,867,287

A reconciliation of income taxes computed using the U.S. federal statutory rate to that reflected in operations follows:

	2016						2015						2014
	Amount			Percent			Amount			Percent			Amount			Percent
Income taxes using U.S. federal statutory rate	$	3,815,962			34	%	$	2,727,131			34	%	$	3,919,779			34	%
State income taxes, net of federal benefit		87,061			1			82,987			1			249,324			2
Impact of foreign subsidiaries on effective tax rate		(365,528	)		(3	)		(388,132	)		(5	)		(76,914	)		(1	)
Impact of manufacturers deduction on effective tax rate		(140,690	)		(1	)		(91,018	)		(1	)		(185,993	)		(1	)
Other—net		41,287			-			(37,036	)		-			(38,909	)		-
	$	3,438,092			31	%	$	2,293,932			29	%	$	3,867,287			34	%

Total income taxes paid were $3,493,558 in 2016, $2,348,865 in 2015 and $3,989,978 in 2014.

United States income taxes have been provided on the undistributed earnings of foreign subsidiaries ($16,163,932 at December 31, 2016) only where necessary because such earnings are intended to be reinvested abroad indefinitely or repatriated only when substantially free of such taxes. The Company would be required to accrue and pay United States income taxes to repatriate the funds held by foreign subsidiaries not otherwise provided.

During 2016, 2015 and 2014, the Company received tax benefits of $0, $0 and $8,882, respectively, as a result of the exercise and sale of incentive stock options that resulted in the disqualification of those incentive stock options and the exercise of non-qualified stock options during the year. The tax benefit associated with the exercise of the incentive and non-qualified stock options has been recorded to common stock.

A reconciliation of the beginning and ending amount of unrecognized tax benefits are as follows:

	2016			2015			2014

Balance at beginning of year	$	249,782		$	248,645		$	220,289
Increases for positions taken during the current period		44,172			27,947			50,735
Decreases relating to settlements		—			—			—
Decreases resulting from the expiration of the statute of limitations		(42,115	)		(26,810	)		(22,379	)
Balance at end of year	$	251,839		$	249,782		$	248,645

The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2013 and non-U.S. income tax examinations by tax authorities prior to 2010.

Included in the balance at December 31, 2016, are $166,214 of unrecognized tax benefits that would affect the annual effective tax rate. In 2016, the Company recognized accrued interest related to unrecognized tax benefits in income tax expense. The Company had approximately $37,000 of accrued interest at December 31, 2016.

The total amount of unrecognized tax benefits could increase or decrease within the next twelve months for a number of reasons, including the closure of federal, state and foreign tax years by expiration of the statute of limitations and the recognition and measurement considerations under ASC 740. The Company believes that the total amount of unrecognized tax benefits will not increase or decrease significantly over the next twelve months.