House Ways and Means Committee Holds First Hearing on Tax Reform.

Led by Chairman Brady, the House Ways and Means Committee held its first hearing on tax reform Thursday. The hearing and witnesses focused mainly on provisions advanced by House Republicans in their Blueprint, including immediate expensing and the impact of a lower corporate tax rate on investment and manufacturing. The witnesses testifying before the Committee included:

John J. Stephens, Senior Executive Vice President and Chief Financial Officer, AT&T Inc.
Mr. Stephens’ remarks focused on the economic growth through investment that would occur through lowering the corporate tax rate and fully expensing capital investments. He stated that he understands that provisions like eliminating the interest deduction in exchange for full expensing may be necessary and urged the Committee to use reasonable transition rules to allow companies to adjust their capital structures.
Read his full prepared remarks here.

Zachary J. Mottl, Chief Alignment Officer, Atlas Tool Works, Inc.
Mr. Mottl represented small businesses and manufacturers in his comments. He fully embraced switching to a border adjustment system along with simplifying the tax code to reduce the burden on small businesses.
Read his full prepared remarks here.

Douglas L. Peterson, President and Chief Executive Officer, S&P Global
Mr. Peterson also advocated for lowering the corporate rate to increase American businesses’ international competiveness. He noted that by keeping S&P’s intellectual property located in the US, they pay a much higher tax rate than their competitors.
Read his full prepared remarks here.

David N. Farr, Chairman and Chief Executive Officer, Emerson Electric Co.
Mr. Farr also advocated for a switch to a territorial system, stating that the US’s high corporate rate and worldwide system of taxation inhibit manufacturers’ ability to compete. He noted the importance of full expensing for research and development costs to their ability to invest.
Read his full prepared remarks here.

Steven Rattner, Chairman, Willett Advisors LLC
Mr. Rattner was the Committee Democrats’ invitee, who currently works as an investment manager and who previously served as Counselor to the Secretary of the Treasury, during the Obama administration. He also agreed that comprehensive tax reform should be a high priority, but stated that it should ultimately focus on deficit neutrality, progressivity, investment in growth and international competitiveness.
Read his full prepared remarks here.

The House will meet again next Tuesday to discuss the Border Adjustment Tax and other issues related to competitiveness.
Read more about the first hearing here: Congress Opens Battle to Reshape Taxes, and the Goal Isn’t Perfection