Urgency felt as tax reform lags

The business community is stepping up its campaign for tax reform as the window of time to pass legislation narrows.

Republicans are aiming to pass legislation by the end of the year. Business advocates have warned that if action is significantly delayed, there could be adverse economic consequences.

{mosads}Key GOP lawmakers and the White House are planning to release a tax framework next week, and the business community hopes that step will help create momentum.

Trade groups representing small and large businesses say a tax code rewrite would boost the economy, jobs and wages — and they aren’t going to rest until a bill becomes law.

“The business community is in the starting blocks here,” said Brian Dodge, a spokesman for the Retail Industry Leaders Association.

Some prominent business groups are running ads in favor of a tax overhaul, hoping to spur lawmakers to action; other groups appear poised to do the same.

The National Association of Manufacturers released a paid digital video that ran last week during “Thursday Night Football,” and the group also intends to run videos in the states where President Trump gives speeches on tax reform.

The U.S. Chamber of Commerce launched a seven-figure advertising campaign earlier this month. So far, the ads have targeted GOP lawmakers in New York and Ohio, and the group plans to expand its campaign to other states and target Democrats.

Neil Bradley, senior vice president and chief policy officer for the Chamber, said that the group has had a “very robust grassroots, grasstops effort” on tax reform. The group felt that those efforts “needed to be buttressed with some paid media that really highlighted the sense of urgency that we feel to get tax reform done.”

Besides advertising, the groups are also holding meetings with lawmakers and the White House on tax reform and courting public support through letter writing campaigns and op-eds.

Business Roundtable President and CEO Joshua Bolten said on a call with reporters Tuesday that CEOs in the group are regularly talking with lawmakers and administration officials.

“The important thing for us … is getting the whole political system aligned in support of the huge initiative that is tax reform,” he said.

The Business Roundtable on Tuesday released its quarterly economic outlook index indicating that CEOs are optimistic about the economy. Paired with that release was a study finding that a lower corporate tax rate would have kept more companies in the United States in recent years. The group is holding an event to promote tax reform on Wednesday.

Republicans in Congress have said that they plan to move tax legislation through a process known as reconciliation, which would prevent a Democratic filibuster. But in recent weeks, Trump has talked of his desire to secure bipartisan support.

Business groups said that they were reaching out to Democrats even before Trump started his overtures.

“We are not limiting our outreach,” said Kevin Kuhlman, director of government relations for the National Federation of Independent Business. “We’re casting a wide net.”

The business community became more united on tax reform after key negotiators announced that they were abandoning a proposal from House Republicans to tax imports and exempt exports. That proposal, known as border adjustment, had divided the corporate world into warring camps.

The retail industry spent much of the year campaigning to defeat the border-tax proposal; now that the idea is off the table, the industry is putting its weight behind the push to lower corporate rates. 

“We didn’t have to spend all of our resources defeating border adjustment,” said David French, senior vice president for government relations at the National Retail Federation, who noted that the group is contemplating paid advertising. “We can now pivot to a pro-tax reform message.”

Indeed, the priorities of retailers for the tax bill are mostly in line with the American Made Coalition, a group that includes Boeing, GE and Pfizer and backed the border tax.

The coalition in recent weeks has been arguing for lower rates for businesses, a territorial tax system and permanent tax changes — ideas also supported by retail groups.

Still, GOP lawmakers and businesses remain divided over aspects of the tax plan. And divisions are likely to reemerge in the business world once lawmakers release firm details about which tax breaks they plan to eliminate.

One major debate is over provisions relating to business investment.

Some GOP lawmakers have said they would like for businesses to be able to immediately write off the costs of their capital investments, a concept known as “full expensing.” The tax blueprint House Republicans released last year included full expensing while also eliminating the deduction for businesses’ interest expenses.

While some businesses, including manufacturers, are pushing for strong capital cost recovery measures, others, such as Koch Industries, have said they would rather see lawmakers focus on lowering rates than implementing full expensing.

Some businesses say the interest deduction should not be eliminated at all.

Vicki Needham contributed.