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Special Report: Taxes — Next Up for Republicans

Posted By Administration, Tuesday, August 1, 2017

Healthcare reform and the repeal and replacement of the Affordable Care Act is pretty much dead for now. There may soon be an attempt at a bipartisan solution but as for now, it’s dead.

Now it is on to the second of the Republican Party’s top two priorities for this Congress and that they want done before the mid-term elections. It’s tax reform. If you’re wondering why that didn’t happen simultaneously or first, the leadership of the Republican Party and the president took on ObamaCare first because it has taxes in it that Republicans want gone and part of tax reform includes doing away with them.

Thus, ObamaCare was the first priority.

The PIA wants tax reform for independent insurance agents and for small business. The association supports the creation of a clear and simple tax code and one that reduces tax rates for small businesses.

On its webpage in Government Affairs, PIA National wrote, “Small businesses have been the backbone to this country’s economy for over 250 years; they stimulate the economy by creating jobs in our local communities and have a history of pulling this country out of recessions. Despite these significant contributions, they are hampered by overly burdensome laws and regulations.”

And that burden isn’t just at the federal level. State and local taxes are equally burdensome.

 

PIA Advocates for Independent Agents by:

  Supporting legislation in Congress to decrease the corporate income tax rate for small businesses.

  Working with Congress, the Small Business Administration (SBA) and the Internal Revenue Services (IRS) to create a simpler tax structure and eliminate unnecessary complexities to create a system that is clear and competitive.

  Monitoring the activities of the IRS and the SBA to ensure that the voices of small business owners are being heard before any changes are made to current tax code

 

A group called the Big Six has put together the basics of tax reform and both houses of Congress will now go about writing a plan. The Big Six are:

  House Speaker Paul Ryan

  Senate Majority Leader Mitch McConnell

  House Ways and Means Committee Chairman and Texas Republican Rep. Kevin Brady

  Senate Finance Committee Chairman and Republican Sen. Orrin Hatch of Utah

  Treasury Secretary Steven Mnuchin

  White House National Economic Council Director Gary Cohn

 

Ryan claims this agreement of principles is supported by the House, the Senate and the president. Basically, they are to:

  Make taxes simpler, fairer, and lower for hard-working American families

  Reduce tax rates as much as possible

  Lower tax rates for small businesses so they can compete with larger ones

  Incentivize taxes for corporations in a way that profits are brought back into the country

 

The Big Six announced the agreement on principles at a news conference late last week. They’re pleased with the results and said for the first time in years the people of the U.S. have elected a Congress and a president that can get tax reform done.

“We are all united in the belief that the single most important action we can take to grow our economy and help the middle class get ahead is to fix our broken tax code for families, small business, and American job creators competing at home and around the globe. Our shared commitment to fixing America’s broken tax code represents a once-in-a-generation opportunity,” the group said in a statement.

Families — the principles state — are at the heart of the reforms and so is small business.

“We also believe there should be a lower tax rate for small businesses so they can compete with larger ones, and lower rates for all American businesses so they can compete with foreign ones. The goal is a plan that reduces tax rates as much as possible, allows unprecedented capital expensing, places a priority on permanence, and creates a system that encourages American companies to bring back jobs and profits trapped overseas.”

The Big Six believe they have come up with a good balance, “And we are now confident that, without transitioning to a new domestic consumption-based tax system, there is a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base.”

The group expects the reforms to come out of committee quickly, “Our expectation is for this legislation to move through the committees this fall, under regular order, followed by consideration on the House and Senate floors. As the committees work toward this end, our hope is that our friends on the other side of the aisle will participate in this effort.”

Will the Republicans actually reach across the aisle? And will across the aisle actually reach back? That’s not likely. Speaking for the Democrats, Oregon Sen. Ron Wyden scoffed at the proposal and called it another set of vague ideas that benefit the rich. “Republicans are dripping tax ideas out like a leaky faucet with no specifics to back them up,” Wyden said.

It doesn’t appear anyone is in the mood to do anything bipartisan. Neil Bradley is the chief policy officer of the U.S. Chamber of Commerce. He said members of the House and Senate tax-writing committees will meet this month at the Reagan Ranch in California to begin drafting specifics and he is going to give a speech at the event.

Brady was asked if any Democrats would be there. Without hesitation he said, “No.”

The Chamber and other business bodies large and small want the reforms and are totally frustrated with the speed at which Congress is not getting the job done. “The engagement and enthusiasm for pro-growth tax reform from Trump administration officials and congressional lawmakers is what will propel this over the finish line,” Bradley said.

On the insurance side of the equation, Evan Greenberg — who heads Chubb — wants to see tax reform sooner rather than later. He is also calling for open trade and significant investment in the infrastructure. At Chubb’s second quarter earnings phone call, Greenberg challenged President Trump and Congress to get the job done.

“My views remain as they were. For our country, and for our economy to reach its full potential — which it is not right now — we need tax reform. We need infrastructure,” he said.

Greenberg called the state of our infrastructure shameful and says it puts the U.S. at a competitive disadvantage. That disadvantage, Greenberg said, is in a sort of a tax on us as other nations like China are making significant investments in theirs.

“An awful lot of this requires legislation. We need an administration that is focused, that is working with Congress, and we need a Congress that comes together to address these issues for our country,” he said.

That urgency is shared by Heidi Ganahl who is the CEO of the world’s largest dog-care franchise, Camp Bow Wow. “Politically, tax relief is the issue that can unite the factions of the Republican Party and even attract some Democrats, so it stands a better chance of passing than divisive issues like healthcare reform. This is vital for Republicans who need a win now."

Bradley’s boss at the U.S. Chamber of Commerce and its CEO Tom Donohue just sent an open letter to Congress and all those aspiring to win a seat in the near future. He said failure is not an option. His organization has teamed with the Business Roundtable, the National Association of Manufacturers (NAM) and the National Federation of Independent Business (NFIB).

They, too, have sent a letter.

Former House Speaker Newt Gingrich is working with a coalition of small business groups — Job Creators Network (JCN), FreedomWorks and the American Legislative Exchange Council (ALEC) — wanting tax relief and the U.S. Chamber of Commerce is also leading a push.

They want something done by Thanksgiving that looks like tax cuts for business, middle-income Americans and repatriation for large businesses so billions in profits offshore can be brought back into the country and put to work.

“I’m optimistic we might be able to get a pretty good consensus on tax cuts and get it passed and signed by Thanksgiving. If we don’t do something like that, we are in real trouble, and we have a real chance of having Nancy Pelosi as the next of Speaker of the House,” Gingrich said.

 

Small business — says a survey done by JCN — views tax reform as a very high priority and an even higher priority than ObamaCare repeal.

  48.6% said tax cuts will help more than healthcare reform

  8.6% want regulatory relief

  70% of the 500 small business owners polled said they’d reinvest savings and give wage hikes to employees, hire new employees and expand

  Of those reinvesting, 23.8% will make capital investments

  20.8% will raise wages for current employees

  13.8% will make new hires

  8.8% will open new outlets

  31.4% said they’d pay off debts

 

And what is the biggest obstacle for tax reform?

  26% say Democrats in Congress are the biggest obstacle

  15.2% blame Republicans

  11% blame President Trump

  20.2% say a biased media is also an obstacle

 

JCN President and CEO Alfredo Ortiz said, “This poll confirms what economists have long known. If you want to create an economic revival on Main Street, then give tax dollars back to small businesses and they will make it happen by reinvesting in jobs, wages and infrastructure.”

Former Best Buy CEO Brad Anderson says the JCN survey is right on target. “It was great to see from JCN's poll that nearly one-quarter of small-business owners would use their tax savings to raise wages for their employees. This demonstrates that a tax cut wouldn’t just help businesses and the economy, but it would also address stagnating wages that are preventing Americans from keeping up with increasing healthcare, housing and other costs.”

By the way, the goal of the former Speaker — and his small business comrades — is to create a sense of urgency. This may just do that.

 

Source links: Forbes, PIA National, The White House, Carrier Management, The New York Times, The Hill — link 1, link 2, link 3, link 4

Tags:  Insurance Content  Insurance Industry  Insurance News  Special Report: Taxes — Next Up for Republicans  Weekly Industry News 

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