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FEI’s Committee on Private Company Policy (CPC-P) held its annual Washington Fly-in on April 19. The Fly-in provides FEI private company members the opportunity to meet with members of Congress and their staff on Capitol Hill. The focus of this year’s meetings was the need to include more equitable treatment of private companies in any Congressional efforts to enact comprehensive tax reform.
The CPC-P has made this issue a top priority for 2016, and the Fly-in allowed FEI private company members to communicate that message in a day-long series of meeting with key members and staff of the House Ways & Means Committee, the body responsible for tax legislation in Washington.
FEI members emphasized the important role pass-through entities play in the U.S. economy in promoting job creation, economic activity and tax receipts, and stressed that any “business only” tax reform that lowers the corporate tax rate without addressing how pass-through income is taxed will place private companies at a serious competitive disadvantage.
To restore fairness to the tax code, and better position pass-throughs to create jobs and increase investment, members stressed that any comprehensive tax reform bill should permit the bifurcation of business and other income on an individual’s tax return, and the application of a business rate equivalent to the highest corporate rate.
While Congressional leaders have indicated comprehensive tax reform will not be considered until 2017, FEI members picked an opportune moment to carry their message to Capitol Hill. Speaker of the House Paul Ryan has formed a Task Force on Tax Reform to develop a blueprint to serve as the basis for consideration of tax reform in 2017 once the dust has cleared from this year’s presidential and Congressional elections.
Speaker Ryan’s tax counsel has asked FEI to provide the private company community’s perspective on what is needed in a revised tax code to put pass-throughs on a more level playing field with C-corporations. The CPC-P will convene shortly to develop FEI’s position and to work with Speaker Ryan’s team and the members of the House Ways & Means Committee to ensure private company concerns are addressed in the Task Force’s blueprint, which is expected to be finalized by mid-June.