ACG Submits Tax Reform Comment Letter to House Ways and Means Committee
ACG submitted a letter to the House to update the Ways and Means Committee on corporate tax reform.
ACG recommended a “simpler and fairer tax environment for middle-market businesses” in a recent letter submitted to the House Ways and Means Committee.
Entitled “How Tax Reform Will Grow Our Economy and Create Jobs,” the letter was presented on May 18 at what was likely the first in a series of hearings to address corporate tax reform.
With the passage of the American Health Care Act of 2017 (the ACA ‘repeal and replace’) by the House, Congressional representatives have now pivoted to tax reform. Rep. Kevin Brady, a Texas Republican and House Ways and Means Chairman; and House Speaker Paul Ryan, a Wisconsin Republican, have both stated that tax reform will occur in 2017, despite increasing consensus among experts that any new legislation is unlikely to pass until at least early 2018.
This letter submission provided an opportunity to concisely summarize and update the committee on the interests, membership and policy objectives of the Association for Corporate Growth, as well as dispel some of the myths surrounding the replacement of the tax deduction of interest paid on corporate debt with full and immediate expensing of capital expenditures.
“If a corporation cannot afford a piece of equipment in the first place, the ability to fully expense the piece of equipment will provide no material benefit or incentive to expand one’s company,” said the letter, adding that “75 percent of startups use some sort of debt financing at inception, and four in five small businesses use some form of debt in their capital structure.”
ACG recommends a simpler and fairer tax environment for middle market businesses and capital providers and lowering of the corporate tax rate. This will lead to continued job growth, business creation and investment in companies of all sizes said ACG’s letter to the House.
In addition to speaking to the issue of interest deductibility, ACG wrote of the benefits of lowering the corporate tax rate as a whole.
“ACG recommends a simpler and fairer tax environment for middle market businesses and capital providers and lowering of the corporate tax rate,” said the letter. “This will lead to continued job growth, business creation and investment in companies of all sizes.”
J.B. Dollison, vice chairman of the board at ACG Global and managing director at Crutchfield Capital, summarized the group’s outlook: “ACG is looking forward to continuing to be a resource for Chair Brady and all Congressional members for insight into the middle market economy. Lowering the corporate tax rate and maintaining interest deductibility are essential building blocks to jumpstart our economy and help America continue to be the most innovative and entrepreneurial country in the world.”
 Why Businesses Use Debt – And How Debt Benefits Businesses (2017), http://buildcoalition.org/wp-content/uploads/2013/06/BUILD_WhyBusinessUseDebt_RebelCole.pdf