ACG Past Chairman Hendrickson Joins Business Executives at the White House
Pamela Hendrickson joined business executives in meetings with senior staff of the White House National Economic Council and the Senate Finance Committee to discuss corporate tax reform.
This week, Pamela Hendrickson, past chairman of the board of directors for the Association for Corporate Growth (ACG), joined business executives representing members of the BUILD Coalition in meetings with senior staff of the White House National Economic Council (NEC) and the Senate Finance Committee to discuss corporate tax reform; specifically, the proposed elimination of interest deductibility. For middle market businesses debt plays a key role in funding daily operations, expansion and job growth. Our tax code taxes net income, interest expense is simply another operating expense and should be treated as such. According to Hendrickson, “Most Americans can agree that we need a more simple and fair tax environment. For middle-market businesses and capital providers this not only attracts and incentivize investment to U.S. companies but also stimulates job creation for local economies.”
Hendrickson is currently chief operating officer and vice chairman of strategic initiatives at The Riverside Company, she specifically highlighted that nearly 80% of middle-market businesses use debt financing in their capital structures to enhance their growth. ACG estimates show that value destruction from changing the cost of capital through elimination of interest deductibility is over $1 trillion for the whole middle market. This is a huge section of the economy. “There are approximately 200,000 middle market companies in the U.S.—those with revenues between $10 million and $1 billion. Middle-market companies employ 1/3 of US workers and have $10 trillion in combined revenues, increasing their cost of capital by making interest expense taxable, inhibits growth and destroys value, both of which are destructive to the economy,” says Hendrickson.
The BUILD (Businesses United to Preserve Interest and Loan Deductibility) Coalition, of which ACG is a member, is a broad group of businesses and trade associations representing multiple industry sectors committed to maintaining the full deduction for business interest expense in the tax code. Interest deductibility is a top priority for ACG members and the Association will continue with work with the BUILD Coalition and its industry partners to preserve this established and pro-growth provision in any corporate tax reform efforts.