This past Sunday, I had the opportunity to spend 20 minutes with new House Ways and Means Chairman, Representative Kevin Brady (R-TX). If you are not familiar with Rep. Brady, he represents the 8th District in the state of Texas and is also the House of Representative Chairman on The Joint Committee on Taxation. Having spent time in Washington D.C. with members of Congress in the past, I knew my time would be limited. I asked Rep. Brady what were some of the challenges he saw facing the Ways and Means Committee under his leadership. He mentioned three areas they will be focusing on:
- International Taxation
- Reconciling the cost of the AFCA for working families
- Tax Reform
As a tax advisor, I was interested in knowing more about the challenges of fixing international taxation and how he envisions tax reform to take place.
Rep. Brady commented that the tax burden placed on business encourages shifting profits across our borders to countries with a lower tax system. I had to agree with him. We all have heard on cable news channels about how high America’s corporate tax rates are, yet American business have yet to see any legislation be approved to fix it. As Rep. Brady commented on November 19, 2015 and reiterated to me on Sunday, “Mandating new rules to raise taxes on American businesses simply makes them more attractive takeover targets for foreign corporations……we should all redouble our efforts to work together to fix our broken tax code.” It was obvious to me that he believes in making sure that research and innovation conducted by Americans should remain at home to create jobs and strengthen our economy.
This was a great lead in to shifting our conversation to tax reform. I asked him whether his approach would be comprehensive or selective tax reform. It was clear that Rep. Brady’s tax reform policy is banking on who will be in the White House in 2017. His goal is to create a simpler tax code, something that would be easier to accomplish with a Republican president. I questioned whether or not he was investing too much faith on the GOP successfully taking over the presidency. After all, the Democratic Party has a very strong and popular candidate in former Secretary of State Hillary Clinton. I was pleased to see that Rep. Brady was optimistic that he would be able to work with his counterparts in the Democratic Party to delivery bipartisan tax reform, but clearly this scenario would not be as easy to achieve and would take longer to accomplish.
Rep. Brady then turned the tables and asked me what I think the Ways and Means Committee should be working on. I responded with passing a tax extender bill immediately and making the R&D credits and the favorable depreciation measures (bonus & Sec 179) permanent. He agreed and commented that he was fairly certain they would get it done before the end of the holiday recess. I commented that this was one of the major topics on my clients minds and the related challenges small business face with asset investments and hiring when Congress waits longer and longer each year to extend these popular tax laws. Rep. Brady even acknowledged that Congress has extended them so often that they are jokingly viewed as “temporarily permanent.”
It was a pleasure to spend this time with Rep. Brady. It is the second such encounter I have been privileged to have with him and I look forward to meeting with him again in the future. With that, I thanked him for his commitment to our country and he was off on a run to get some exercise. He was barely a block into his run before another constituent stopped him to ask him what I can only imagine was a question on tax extender bills.