AIC Touts ACG’s ‘Boots on the Ground’ to Preserve TCJA
In an ACG members-only webinar, American Investment Council CEO Drew Maloney discussed shifting tax and tariff rules impacting the M&A community
Private equity investors and dealmaking partners are facing a friendlier regulatory environment during this Trump administration compared to Biden’s. Still, American Investment Council (AIC) President and CEO Drew Maloney told ACG members, the M&A community still has plenty to keep track of as President Trump and lawmakers pursue impactful changes to tax legislation.
Maloney discussed the current state of tax and tariff rules and mused about what’s ahead during ACG’s members-only webinar, Private Equity in the Age of Tax Reform: Navigating the Tax Cuts and Jobs Act Again.
In partnership with the AIC and moderated by ACG CEO Brent Baxter, the webinar offered insights into how PE firms, their portfolio companies and M&A partners can navigate the slew of policy updates on the horizon.
With Trump back in office and Republicans in control of Congress, Maloney highlighted the opportunity for the private equity community to reestablish favorable relationships and dialogues in Washington.
Event Recap
WHAT: Private Equity in the Age of Tax Reform: Navigating the Tax Cuts and Jobs Act Again Webinar
WHEN: March 20, 2025
THE TAKEAWAY: ACG’s presence across the U.S. offers the M&A community a “boots on the ground” approach to preserving private equity’s interests in Washington.
“The good news is, from a regulatory standpoint, in the previous four years you had regulators at the SEC and FTC, and some in the Financial Stability Oversight Council, that everyday woke up and said, ‘Okay, private equity is in our crosshairs. What can we do to either slow down their M&A, or make their reporting requirements more onerous?’” Maloney said. “But now we have the ability to reestablish relationships with these agencies. They are going to be more favorable to us, in a general sense.”
That’s not necessarily the case at the state level, however, especially in certain sectors in which dealmakers are active, like healthcare. State regulators will also continue their focus on transparency and ESG (environmental, social and governance) requirements that will impact PE compliance.
These evolving rules can create an even more complex regulatory environment for the M&A space, particularly when dealmakers consider how rules and requirements differ from one state to the next.
Back on Capitol Hill, PE’s spotlight is on Republicans’ efforts to pass what is essentially an extension of the 2017 Tax Cuts and Jobs Act (TCJA), certain provisions of which are set to expire at the end of the year. But despite a more favorable climate in Congress, private equity still faces some challenges.
Maloney highlighted the AIC’s ongoing effort to preserve the tax treatment of carried interest, which currently allows PE to tax capital gains at 23.8% instead of the typical income rate of 40.8%. Trump’s 2017 legislation said PE must hold assets for three years to be taxed at that lower rate, and a reversal of that would put the U.S. behind China, Europe and Canada in terms of the highest capital gains tax rate. “If you’re putting America first, you can’t be third-worst,” Maloney stated.
Other concerns include the so-called C-SALT proposal, which would prevent corporations from deducting state and local taxes (SALT) from federal returns, as well as the uncertain future of the Inflation Reduction Act.
Finally, M&A dealmakers have also kept a close eye on quickly changing tariffs. Maloney acknowledged that, in the early days of any presidential administration, change is inevitable, but can nonetheless be difficult to manage. While tariffs have created headaches for many companies, the business community had expected them. “The president really believes in tariffs,” said Maloney. “And [he’s] going to do tariffs until the market says they don’t work. So, you have to plan on tariffs coming, and see how the market reacts.”
In the meantime, Maloney recommended that private equity sponsors work with their portfolio companies to assess their supply chains and understand the points at which these tariffs could potentially have an impact.
At the broader level, Maloney highlighted the ability for ACG and its members to have “boots on the ground” across Congressional districts. He encouraged members to get in touch with members of Congress, especially those on tax writing committees, and champion for the extension of the 2017 TCJA and to preserve private equity’s interests.
Carolyn Vallejo is ACG’s Digital Editor.
Middle Market Growth is produced by the Association for Corporate Growth. To learn more about the organization and how to become a member, visit www.acg.org.
