This message was sent to ##Email##
Catherine Treadwell Perry, J.D., Director of Government Relations
|Tax and Domestic Economic Policy Committee
ASA Advocacy participates in the National Association of Manufacturing Tax and Domestic Economic Policy Committee. Last week, I attended the policy committee meeting to help draft the 2020 policy priorities. This is important to ASA members, because we have a seat at the table with NAM to ensure our manufactures are in the best tax and economic position. If our manufactures are doing well, our wholesaler-distributors can do well!
Tax policy plays a critical role in the ability of manufacturers to thrive in the United States and effectively compete in a global economy. We support a federal tax system that meets principles such as, promoting economic growth and U.S. job creation with the ability of U.S. manufacturers to compete in world markets. The tax system should be simple and stability certainty should be important goals of federal tax policy and the tax burden should be as low as possible, broadly based and nondiscriminatory.
Capital formation is key to economic growth, U.S. job creation and competitiveness. In order to maintain a healthy economy, tax policy should help ensure that the United States is the best country in the world in which to manufacture. An essential element of this is that tax policy should attract private sector capital formation including foreign direct investment. We support a tax system that has a strong capital cost recovery system, has a deductibility of interest, a low capital gain tax rate, elimination of double taxing the dividend taxes for corporate entities, and to repeal the estate and gift tax.
A majority of manufacturers operate as “S”-corporations or other “pass-through” entities and pay income taxes at individual rates. High tax rates on pass-through businesses will take resources away from investment and jobs. It is therefore critical that the tax burden on pass-through businesses be as low as possible. In addition, the tax code should recognize the special type of risk factors involved in the operation of pass-through businesses and their limited access to capital markets. Manufacturing is a capital-intensive industry and, for pass-through entities, the capital to grow and expand operations, increase product lines and hire additional workers most often comes directly from the owners. A higher tax burden negatively impacts these businesses and their ability to reinvest.
The primary purpose of federal tax laws should be to raise revenues from as broad and fair a base as possible and in a manner that does not unfairly burden specific products or sectors of the economy. Congress should disclose the primary purpose of any new tax. If the purpose of a tax is to raise general revenue, then industry- or product-specific taxes are the least fair and least efficient means of meeting that goal, and should be avoided. As a matter of general principle, industry- or product-specific taxes inhibit the growth of the targeted sector, impede the ability of targeted companies to compete globally, distort resource allocation and unnecessarily complicate the tax code.
As the legislative branch of the federal government, Congress has the sole authority for making new laws or changing existing laws. We strongly support long-standing procedures for the development and enactment of federal legislation and the approval of tax treaties. In particular, representatives of the taxpaying public should have the opportunity to present their views and recommendations.
It is important for the committees of jurisdiction to hold fair and adequate public hearings on proposed tax policy changes before developing and considering legislation. Where necessary, Congress should exercise its oversight authority of the Executive Branch to ensure that tax legislation is properly implemented.
There are many aspects of tax policy that are important to ASA members and this article is by no means an exhausted list. Please stay tuned for updates as ASA works with NAM to finalize the priorities for 2020.
- Supreme Court Justice Ruth Bader Ginsburg completed three weeks of radiation treatment for a cancerous tumor that was discovered on her pancreas, according to a statement from the court. Ginsberg, 86, has been treated for cancer in various forms over the past 20 years, and Senate Majority Leader Mitch McConnell has indicated Republicans would work to fill her seat if she left the court before 2021, ensuring a 6-to-3 conservative majority. (NPR News)
- Rep. Seth Moulton (D-Mass.) is dropping his campaign for the Democratic presidential nomination. His exit, following former Colorado Gov. John Hickenlooper's last week and Washington Gov. Jay Inslee's this week, narrows the field of candidates to 21 ahead of next month's debates. (The Boston Globe)
- Former Rep. Jason Lewis (R-Minn.) launched a campaign for his party's nomination to challenge Sen. Tina Smith (D-Minn.) next year. Lewis, a longtime conservative talk radio commentator who was elected to Congress in 2016, lost his re-election bid last year. (Twin Cities Pioneer Press)
- The Treasury Department's estimate two years ago that drilling in Alaska's Arctic National Wildlife Refuge could bring in $1.8 billion is higher than both the latest federal estimates and an analysis by a media outlet of previous lease sales that suggests new exploration could earn as little as $45 million in the next decade. Internal government records and other documents show that several years ago, the Interior Department requested more positive assessments of ANWR's prospects - at an expedited pace - and deleted references to meager nearby wells from a draft plan. (The New York Times)
- The promise of energy reliability won out over concerns about customer and landowner impacts as Wisconsin's Public Service Commission unanimously approved the 100-mile, $500 million Cardinal-Hickory Creek transmission line to run from the state to Iowa. Conservation and environmental groups are expected to bring a legal challenge to the project, whose ultimate route will depend on decisions by federal regulators. (Wisconsin Public Radio)
- After multiple meetings, President Donald Trump and Cabinet officials decided to retain the biofuel blending waivers granted to small refineries and take steps to make up for lost biofuel volumes, according to people familiar with the matter. The plan under development would encourage the use of gasoline that contains 15 percent ethanol and would increase by 500 million gallons the amount of conventional renewable fuels that have to be used in 2020, risking a backlash from refineries.
- President Donald Trump said the administration is looking at options to boost the economy, including a cut to capital-gains taxes. Trump repeated that he isn't, however, worried about an economic downturn, saying that "we're very far from a recession." (The Wall Street Journal)
- Trump said he is no longer considering tax cuts to boost the economy after pitching reductions in capital gains and payroll taxes earlier in the week. An administration official said the White House has not reversed course, since - despite the president's discussion of the tax reductions - neither were being actively considered.
- President Donald Trump said the United States and China would soon begin serious negotiations to scale back the trade war, telling reporters that his trade negotiators had received "very good calls" from China on Sunday. His comments came after he sent mixed messages on the escalating tariffs between the countries. (The Associated Press)
- Trump said he is looking at hosting next year's Group of Seven summit at his Trump National Doral Miami Golf Resort. Trump, who has a financial interest in his hotel and resort businesses and has been criticized in the past for hosting foreign leaders at his Mar-a-Lago Golf Club in Florida, is likely to face questions about whether he is profiting from official government business. (CNN)
- Democratic presidential hopeful Sen. Bernie Sanders made an adjustment to his hallmark "Medicare for All" bill, giving organized labor more power to negotiate benefits than other consumers by requiring any savings that employers have under Medicare for All be passed down to union members in the form of compensation or other benefits.
- House and Senate are both in recess.
| || NEWS FROM STATE AND LOCAL |
Update on State Bills Being Tracked
New State Activity
- New Jersey (S3965 and A5636) - requires DEP, DOH, DCA, owners or operators of public water systems, and owners or operators of certain buildings to take certain actions to prevent and control cases of Legionnaires’ disease. Sen. Thomas Kean (NJ-21) is now a co-sponsor of SB3965.
- New Jersey (AB5656) - requires public water systems to provide customers and local officials with expedited notice of elevated lead levels. Assemb. Gabriela Mosquera (NJ-4) and Assemb. Valerie Huttle (NJ-37) are now co-sponsors of the bill.
- Michigan (SB0401) – bill would require source water testing for public water supplier proposing to hook up to a new water source.
- Michigan (SB0398 and HB4747) - both bills are proposing the formation of a Commission to study the impacts on lead poisoning to children’s health including from drinking water sources and provide recommendations for remediation. ASA has reached out to the sponsors of both bills offering our input from on the issue and if considered appropriate, to nominate an ASA representative to serve on the Commission.
- New Jersey - Governor Phil Murphy and the NJ Poison Center announced on 8/22/19 the establishment of a 24/7 Health Hotline for residents with questions and concerns about the health effects of lead exposure. The phone number for the Health Hotline is 1-866-448-2432. The hotline can provide callers with information on what to do if their home has a lead service line, where to get water filters, how to participate in the city’s service line replacement program, as well as the phone number and locations where the City of Newark is distributing free cases of bottled water.
Former Senate Majority Leader Harry Reid, a democrat from Nevada, isn’t happy that some of his party’s presidential candidates are pushing for Medicare for All and decriminalizing border crossings, two hot-button issues in the Democratic primary. In a half-hour phone conversation with VICE News, Reid was blunt when asked if he thought supporting Medicare for All would be problematic in the 2020 general election.
Democratic presidential candidate Bernie Sanders has told voters in coal-producing Kentucky that it’s possible to be a friend of coal miners and a believer in climate change and the need for cleaner energy sources to combat it. In blunt terms rarely heard in Kentucky’s political circles, the Vermont senator said recently on a stop in Kentucky that bold action is needed to confront the dangers from climate change. That course of action should include turning away from fossil fuels to curb greenhouse gas emissions blamed for global warming, he said.
The New York Times
White House officials have begun preparing options to help bolster the American economy and prevent it from falling into a recession, including mulling a potential payroll tax cut and a possible reversal of some of President Trump’s tariffs, according to people familiar with the discussions. Mr. Trump continues to insist the economy is “doing tremendously well,” and he and his advisers publicly dismiss any notion of an impending recession. But behind the scenes, Mr. Trump’s economic team is pulling together contingency plans in the event the economy weakens further.
7701 Las Colinas Ridge, Ste. 800, Irving, TX 75063