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President’s tax reform push enters next phase

Source: The Hill

June 6, 2017

By Naomi Jagoda

The White House is starting the next phase of its tax reform push with the expected launch of a formal set of listening sessions with industry groups.

Since the release of President Trump’s one-page tax plan in April, administration officials have been meeting with lawmakers as they work to flesh out the proposal. Now, the officials are branching out to meet with business leaders, who are eager to make their priorities known.

Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn are slated on Tuesday to hold a listening session focused on the transportation sector. White House spokeswoman Natalie Strom said the meeting is about one of a dozen that the White House plans to hold this summer with business leaders from a variety of sectors of the economy.

"The industry listening sessions - combined with our meetings with members of Congress on both sides of the aisle - will help us develop a plan that everyone who wants to simplify the tax system and let middle-income Americans keep more of their hard-earned money can get behind," she said.

The Trump administration and congressional Republicans have made tax reform one of their highest priorities.

But overhauling the tax code is a heavy lift that will require lawmakers and the White House to do away with popular corporate tax breaks. While businesses across the board want to see a tax bill that lowers rates, various industries also want to make sure the tax preferences in the existing code that they rely on are maintained.

The listening sessions could help get stakeholders to rally behind an eventual tax bill.

“I think they’re indispensable,” said former Rep. Phil English (R-Pa.), who is now a senior government relations adviser at Arent Fox.

He added, “The only way to get to tax reform is if the administration gets ... very diverse sets of interests in the business community and the economy to join hands.”

Former Rep. Rick Lazio (R-N.Y.), who now works as a senior vice president of the tax consulting firm Alliantgroup, said that the listening sessions would help the White House make sure it is not missing any unintended consequences of its tax proposal.

Administration officials will want to stifle opposition and get supporters energized about backing the future bill, Lazio said.

A top tax priority for Republicans is to make the tax code more conducive to economic growth and incentivize businesses to bring jobs back to the United States.

Meeting with business leaders will give White House officials “a sense of what it will take to change the way businesses are operating,” said Lisa Zarlenga, co-chairwoman of the tax group at Steptoe & Johnson.

The formal listening sessions won’t be the first time that the administration discusses tax reform with business leaders.

Early in his presidency, Trump held roundtables with executives from industries such as transportation, manufacturing and retail, and tax reform was one of a number of topics that came up during the discussions. More recently, Mnuchin, Cohn and their staffs have also had some conversations with stakeholders.

Groups that have met with Trump administration officials in the past have found the meetings to be beneficial.

“I think listening sessions are a compelling way to build the relationships and foster the understanding necessary to move to the next step,” said David French, the senior vice president for government relations at the National Retail Federation, whose group met with Mnuchin in May.

Another retail group, the Retail Industry Leaders Association (RILA), also held a meeting with Mnuchin last month. RILA spokesman Brian Dodge said that Mnuchin had a “remarkable understanding of the retail industry” and “quickly grasped” retailers’ concerns about the border-adjustment proposal in Speaker Paul Ryan’s (R-Wis.) tax plan, which would tax imports and exempt exports.

The Businesses United for Interest and Loan Deductibility (BUILD) Coalition has met with staff at the National Economic Council and Treasury Department.

“The benefit of these meetings for the administration is to hear directly from business practitioners how eliminating or limiting interest deductibility will raise their cost of capital, make it harder for them to manage day-to-day operations as well as invest in strategic initiatives,” said coalition spokesman Brai Odion-Esene.

Other groups, including some outside of the business community, are hoping to get a chance to get their viewpoint across to administration officials as well.

Steve Taylor, the head of government relations for United Way Worldwide, said that his group wants to meet with the White House about how its tax plan could affect charitable giving.

“We’re really hoping that we get an opportunity to go in and explain why there would be such a negative impact,” he said.

Trump’s proposal would keep the charitable deduction, but it would also reduce the number of people who take it because the plan also increases the standard deduction. Taylor said that this could have “unintended consequences” and lead to a decline in donations to charity. His group wants the White House to allow people to deduct their charitable contributions even if they take the standard deduction.

The listening session with industry groups will follow administration officials’ tax-reform meetings in May with members of Congress.

Mnuchin and Cohn had conversations with lawmakers on the congressional tax-writing committees and various groups within the House and Senate Republican conferences. Mnuchin and Cohn also meet regularly with House GOP leadership and the chairmen of the tax-writing committees. Vice President Pence has also been in the Capitol to huddle with lawmakers on tax reform.

The White House and congressional GOP leaders have said they want to produce one bill that they can all support. Cohn told Fox Business on Friday that the White House plans to give Congress a more detailed tax plan “by the end of the summer.”

“We are into the nitty gritty details of working on tax reform right now,” he said. “We will have a very detailed drafted tax plan to be delivered to Congress by when they get back from the August recess.”