Industry Cheers ‘Big Six’ Tax Reform Framework
The unveiling of the tax reform framework created by the so-called “Big Six,” which proposes reductions to corporate and pass-through-business tax rates, has earned the initial approval of industry trade organizations. The framework’s release is “an essential first step toward addressing the inequities and distortions in the current tax code, according to Andrew Harig, senior director, sustainability, tax and trade at Arlington, Va.-based Food Marketing Institute (FMI), while on the supplier side, Grocery Manufacturers Association (GMA) President and CEO Pamela Bailey characterized the move as “a critical step towards vitally needed tax reform that will generate economic growth.”
“We’re grateful the negotiators are proposing not only a significant drop in the corporate tax rate, but also in the rate paid by pass-through businesses, which is an important step toward creating a level playing field in the marketplace,” said Harig. “These lower rates will help accomplish the broader goals – shared by the negotiators, President Trump and the food retail industry – of creating jobs and driving economic growth in the sector, while also helping to guarantee that Americans continue to have the safest, healthiest and most affordable food supply in the world.”
He added: “The food wholesale and retail industry is highly taxed, and FMI’s members – who average a 1 percent annual profit margin – stand to benefit greatly from tax reform. We urge Congress to move expeditiously to create significant, lasting reform that focuses on lowering effective rates, creating tax parity among all industries, and simplifying the complexity that hinders job growth.”
“We applaud House and Senate Republicans and the White House for continuing to pursue once-in-a-generation tax reform that will help spur job growth in communities across the country,” noted Greg Ferrara, SVP of government relations and public affairs at the Arlington-based National Grocers Association (NGA), which advocates for independent grocers. “With locally owned independent supermarkets operating on 1-2 percent profit margins, lower tax rates would allow grocers to significantly improve their stores, hire additional staff and expand offerings. As Congress begins working to overhaul the tax code, it’s crucial any proposals to pay for the lower rates do not fall solely on the back of the businesses lawmakers are attempting to support.”
“We need a tax system that puts American manufacturing on a level playing field with the rest of the world,” asserted Bailey. “This is our best opportunity in 30 years to enact meaningful tax reform. Congress must take swift action on bold, pro-growth tax reform to provide much-needed relief to American families and the businesses that create jobs for American workers.”
She continued: “As more details are provided, we will review these tax reform proposals against a set of core principles embraced by the food, beverage and consumer products sector. Our industry supports a lower tax burden for hardworking Americans, lower tax rates for American employers, and a globally competitive, territorial tax system. Tax reforms should fuel consumer purchasing power and business investments in innovation, which will generate more job growth for American families.”
On Sept. 21, Washington, D.C.-based GMA sent a letter (see attached file) to President Donald J. Trump and other key tax negotiators in which it requested action this year on tax reform.
The Big Six comprises House Speaker Rep. Paul Ryan, R-Wis.; Rep. Kevin Brady, R-Texas, chairman of the House Ways and Means Committee; Majority Leader Sen. Mitch McConnell, R-Ky.; Sen. Orrin G. Hatch, R-Utah, chairman of the Senate Finance Committee; Treasury Secretary Steven Mnuchin; and National Economic Council Director Gary Cohn.