Below are the public policy issues affecting the middle market that MMG is watching this week.
Spotlight on Tech
The spread of so-called “fake news” has drawn attention from the public over the past year, with individuals on both sides of the aisle accusing social media of propagating false stories. Revelations have emerged that Russian shell accounts were used to buy $100,000 of Facebook advertisements during the campaign. Meanwhile, the investigation underway into the 2016 election by special counsel Robert Mueller is reportedly “zeroing in” on such tactics.
Facebook is responding to the scrutiny, recognizing the negative effects that government oversight could have on its business model. Increased technology regulation has the potential to affect every type of business.
Lawmakers are beginning to call for large tech companies to publicly testify on issues. Axios this week outlined the case for why such companies “are no longer sacred in Washington.”
For a deeper dive into the issue, check out “There’s Blood in the Water in Silicon Valley” from BuzzFeed News.
Tax Framework Coming Soon
GOP leaders have indicated that they will release a framework for the “core elements of tax reform” on Sept. 25, per The Hill. Once the framework is released, Congress will turn its attention to passing a budget resolution.
A budget resolution with reconciliation instructions for tax reform has already been passed by the House Budget Committee, and Republican leaders need to ensure they have enough support for tax reform plans prior to full passage in the House and Senate.
The House Freedom Caucus, in particular, has indicated that it needs to see a framework prior to supporting the budget; its adherents were disappointed with the perceived lack of free-market principles in the recent health care reform effort. The caucus has also said that it favors deficit-financed cuts. House Speaker Paul Ryan has said previously that revenue-neutrality is a must. But when pressed recently, he indicated that he “didn’t want to get ahead of the announcement” and that the most important task is creating pro-growth tax reform.
To achieve any level of bipartisan support, tax reform must be completed outside of the reconciliation process, according to Democratic leaders.
Stay tuned for more.
Ted Cruz Lays out Tax Reform Plans
Republican Senator Ted Cruz laid out his vision for tax reform at a Tax Foundation event this week, Roll Call reports. Though the Texas Senator is not part of the Senate Finance (that is, tax writing) Committee, he is representative of the chamber’s Tea Party members, who don’t have a formalized group like the House Freedom Caucus.
Key points in Cruz’s vision for tax reform include:
- An extension of the budget window for deficit-financed bills passed through reconciliation from 10 years to 20 to 30 years
- Lowering the corporate tax rate
- Repealing the estate tax
- Rolling back Dodd-Frank (Morning Consult has more on that)
- Immediate expensing of capital expenditures—though he did not mention the deduction of interest paid on corporate debt
Ben Marsico works on public policy issues for ACG.