Tax reform: It won’t come easy…
February 27, 2017On February 15, I spent the day on Capitol Hill meeting with the tax counsel for a variety of Republican and Democratic members of the House Ways and Means and Senate Finance Committees. Conducting this type of in-person outreach to legislators and their staff is one of my most important responsibilities as the president of the Alliance. And with tax reform – the Alliance’s signature and single most important issue – squarely on the congressional priority list in 2017, this role takes on even more significance. Meeting with policymakers, particularly specialists like tax counsel, can sometimes be intimidating. After all, these folks have forgotten more about the Tax Code than I will ever know. They’re bright, committed, and curious about how organizations with a tax preference or exemption provide real value for individual Americans and the nation’s economy. Fortunately, I come to the table armed not only with a firm belief in the value of the fraternal model, but with statistical and anecdotal evidence to demonstrate how Alliance members secure the financial futures of millions of families, and create and coordinate the philanthropic effort of their members in communities across the country every day of the year. Here is the “Readers Digest” version of the takeaways from these meetings:
- Tax reform legislation will almost certainly be introduced in 2017. While Treasury Secretary Steven Mnuchin predicted a Tax Code overhaul by August, legislation may not make it to the President’s desk until 2018 due to a number of complicating factors.
- There will be a House and Senate version of tax reform, and the two proposals may not resemble each other in the least. Working out the differences in those plans could result in delays securing congressional consensus on the plan sent to the President.
- The significant tax implications of the repeal of the Affordable Care Act and the process for that repeal may have to be worked out before major tax reform can be considered. As the GOP is discovering, the repeal and replacement of the ACA is proving to be a much more difficult task than anticipated.
- The revenue generation aspects of the proposed Border Adjustment Tax will play a key role in the other provisions of the tax reform package. Should the Border Adjustment Tax not be enacted, Congress will likely have to seek other sources to replace the revenue lost as a result of proposed cuts to individual and corporate tax rates.
- While fraternals are not on anyone’s radar screen – in large part simply because the discussion of specific tax reform proposal components is still in its infancy – EVERYTHING is on the table.
- The world’s largest taxi company owns no vehicles – Uber
- The world’s most valuable retailer owns no inventory – Ali Baba
- The world’s largest accommodation provider owns no hotels – Airbnb