House and Senate Get Started on Tax Reform; Where Does Donnelly Stand?

Late last week, the House Ways and Means Committee concluded its markup of the GOP tax reform bill (the Tax Cuts and Jobs Act) and voted along party lines to move the measure, 24-16. The core of the House bill reduces the number of individual tax rates, slashes the corporate tax rate and eliminates many deductions and credits.

The bill now will be taken up by the full House of Representatives for debate and vote – likely before the Thanksgiving recess. What are some sensitive issues being discussed in the tax reform bill? Pass-throughs, adoption tax credits, deductibility of state and local taxes (SALT), excise tax and more.

The GOP can only lose 22 votes in the House and whip counts are being held very close to the vest – only five or six Republicans have publicly stated that they are against the bill in the current form (all due to SALT).

Meanwhile, the Senate decided on Thursday to release its own tax reform plan. From the business perspective, the differences largely are about adjusting the dollar dials and creating negotiation items. In other words, politics. The Senate option does delay some positive economic effects, but if that’s what it takes to get a permanent tax reduction in the books so be it! We do want to point out that there are some notable differences between the two versions, particularly on the individual side – including with the estate tax and mortgage deduction, which, again, serve to set up further negotiations.

Senator Todd Young welcomed the effort from the Senate Finance Committee.

“I’m encouraged by the Senate’s proposal to create a tax code that is simpler, fairer and allows hardworking Hoosiers to keep more of what they earn. I’m also glad that this proposal maintains the adoption tax credit that is important to so many Indiana families. As we continue to debate a final tax relief package, I will keep working to ensure Hoosier voices are heard.”

Meanwhile, Sen. Joe Donnelly, didn’t give away his stance: “As I have said, tax reform should create jobs, protect jobs, invest in American workers and benefit middle class families. I will carefully review the Senate proposal and continue to engage with my colleagues and the White House on behalf of Hoosiers as the Senate works on tax reform.”

Donnelly also met on Thursday with the White House Director of the National Economic Council Gary Cohn to discuss his tax reform priorities. Earlier last week, Donnelly participated in another such meeting with White House Director of Legislative Affairs Marc Short and Cohn. President Donald Trump called in for a portion of the event. In that meeting, Donnelly discussed his tax reform priorities and shared a letter that he also sent to Vice President Mike Pence on Tuesday emphasizing that the tax policies should align with the interests of American workers and support companies that invest in the U.S.

Donnelly’s priorities are consistent with his End Outsourcing Act, which would support companies that invest in American workers and penalize companies that ship American jobs to foreign countries.

The Hill reported late last week that “Blue Dog Democrats are lining up in firm opposition to the Republicans’ tax code overhaul, hoping that Tuesday’s election results (particularly in Virginia) will force GOP leaders to reach across the aisle for a bipartisan alternative.”

Donnelly, a Blue Dog Democrat, has not said anything of the kind publicly and has been heavily courted by the Trump administration for his vote.

Tax Reform the Talk of Fly-in

More than 100 of the state’s top business leaders descended on D.C. this week for the Indiana Chamber’s Fly-in event with our congressional delegation.

Attendees received meaningful and timely information from their representatives and senators through policy briefings, special dinner discussions and office visits.

Tax reform was the hot topic. How ironic that while we were D.C.-bound that President Donald Trump would be heading to Indianapolis to roll out his tax reform plan for the first time, and taking nearly half of the Indiana delegation with him on Air Force One for the announcement. But almost all Hoosier delegation members made it back in time to address their business constituents.

The tax reform message the Indiana Chamber contingent delivered to lawmakers in D.C. was that failure should not be an option – this needs to get done!

Senator Rob Portman of Ohio wraps up his remarks on tax reform – turning the floor over to Sen. Todd Young and Sen. Joe Donnelly for a Q&A session.

What caught our attention was how deeply committed everyone is to have tax reform cross the finish line. We felt that from our guest speaker, Sen. Rob Portman of Ohio, considered the Senate fiscal expert, to Indiana members in the House and Senate, including Democratic Sen. Joe Donnelly.

They know it’s important not only to them politically but they also realize that it’s much needed policy.

President Trump’s tax reform framework, which assuredly was done in tandem with congressional leaders, includes actions that the Indiana Chamber and business community at-large have been championing for some time:

• Lowering the corporate tax rate from 35% – the highest in the world today, which drives investment, jobs and even corporate headquarters overseas
• Lowering the top personal income tax rate – which now offers disincentives for initiative, investment and risk-taking while reducing the number of brackets
• Eliminating the alternative minimum tax (AMT), which is overly complex and ineffective, and the estate tax, which endangers many family farms and small businesses
• Adopting a territorial system in which income earned overseas is not taxed in the U.S.

In our Q&A with Sens. Donnelly and Todd Young, they were asked to handicap the likelihood – on a one to 10 scale – of a meaningful tax reform package making it through Congress. Donnelly gave it a fairly hopeful six, while Young said he’s more confident today than even a few months ago and now puts the chances for success at seven-plus.

Young added: “At a time when the rate of business creation is lower than at any period in my own life, I feel like the time is now for tax reform. And the President made a compelling case in what I thought were pretty accessible terms (for Americans).”

Donnelly summed up his thoughts on the matter: “My view on tax reform is simple: I want to try to get to ‘yes’. I think it’s much better if it’s bipartisan. … I think it’s a much better message to the country.”

At our legislative briefing, Congressman Larry Bucshon (IN-08) offered his assessment as well. “As long as both sides don’t go to our corners and stick with our traditional talking points – trying to win an election in 2018 – we are going to get this done.”

Tax reform, if done correctly, would broaden the base while lowering rates across the board – spurring new investment, job creation, economic growth and, ultimately, tax revenues, without increasing the federal deficit.

Our tax code should look like it was designed on purpose for strategic economic growth.
We are hopeful that’s what will happen in the coming months.

A big thank you to our D.C. Fly-in sponsors for making the event possible: Zimmer Biomet (dinner sponsor), Allegion (cocktail reception sponsor), Build Indiana Council (legislative briefing sponsor), AT&T, The Boeing Company, Duke Energy, The Kroger Co., Old National Bank and Wabash Valley Power.

We hope to see everyone who attended – and more – back next year!

Senators Discuss Tax Reform, Trip to Indy During D.C. Fly-in

While the irony of timing isn’t lost on anyone, the Indiana Chamber’s annual D.C. Fly-in delegation was in Washington D.C. yesterday while President Trump and several Indiana congressional representatives were in Indianapolis as the President revealed his tax reform plan.

It was an important moment for Indiana to be in the national spotlight as the much-anticipated tax reform plan was revealed. Read Indiana Chamber President Kevin Brinegar’s statement on the reform plan here.

And though some of Indiana’s federal lawmakers were in Indianapolis, both of Indiana’s senators were able to return in time to attend the D.C. Fly-in dinner and address over 100 Hoosier business leaders about their trip with the President.

Senators Joe Donnelly and Todd Young  discussed the potential for bipartisan agreement on tax reform (and a “sweet” treat Donnelly brought with him from Air Force One):

Additionally, one of the Senate’s leading tax experts, Sen. Rob Portman (R-Ohio), shared his perspective at the D.C. Fly-in dinner. Here are a few of his comments to the group, on the “positive list” of reforms included in the President’s tax plan:

We’ve been keeping you updated on social media (find us on Twitter at @IndianaChamber or follow #ICCinDC, and on Facebook at www.facebook.com/indianachamber/).

Thank you to all our event guests and sponsors for the 2017 D.C. Fly-in, including Build Indiana Council, Legislative Briefing sponsor; Allegion, cocktail reception sponsor; and Zimmer Biomet, dinner sponsor.