The following article originally ran in the May 2012 issue of the ESOP Report, the newsletter of The ESOP Association, as the Washington Report column. Archived issues of the ESOP Report can be found in the members only section of the Association’s website.
Talk inside the beltway says that tax reform is to be developed and enacted in 2013. And, of course, 2013 is around the corner.
While it is absolutely foolish to ever predict with assuredness what the U.S. Congress will do, or not do, many Congressional leaders and their top staff aides who work on the tax committees, repeat to press, and at conferences, that 2013 is the year.
While relying on the past is not fool proof, the past is prologue; as the Association’s YouTube post on tax reform set forth (http://youtu.be/SxxyMf_Zjvs) looking at the last time Congress did tax reform, and the time line of that tax reform process, can be indicative of what to expect.
One, it is somewhat irrelevant that while the goal might be to have on the President’s desk by year-end 2013 a tax reform bill, it probably will not be finished until mid-year 2014.
The 1986 Tax Reform Act actually was developed by the House Ways and Means Committee in 1985.
Two, what the House Ways and Means Committee does with a big tax bill in terms of specific provisions is the primary changes in law that the President signs.
Ergo, what is done in the House Ways and Means Committee with regard to ESOP tax laws is very, very important. There are opportunities, and some precedent to alter a House Ways and Means approved tax bill, but they are not great — at best, a 20% chance.
Allies of ESOPs in Congress, as evidenced by Senator Mitch McConnell’s message to the 35th Annual Conference (You can watch Senator McConnell’s remarks here http://youtu.be/OKycW_BGrSc.), and remarks made by Congressman Peter Roskam [R-IL] to an ESOP PAC breakfast, may be met with cynicism by most ESOP fans these days with their recommendation that protecting ESOPs means telling the ESOP companies’ stories, Congressional district by Congressional district, in an old fashioned one on one style. But, no matter what national news says, or political opponents say, engaged, sincere voices still have impact on an elected official. [Sadly, TV commentators and others have led many Americans, on which our democracy depends, to think only big money, even in the form of bribes, is the way to “win” in DC. If that were true, ESOPs would have been dead long ago, as the primary ESOP voice in DC for the past 30 plus years is not big money, nor does it ever, ever think about nefarious activities.]
So, ESOP advocates need to lace up their shoes, as yesterday was too late to make the case for ESOPs with your elected officials, but today can suffice.
All the tools, including macro data proving ESOPs are good for employees, companies, local communities and America are on The ESOP Association’s website.
Indiana Senate Race and ESOPs: With the win of Indiana State Treasurer Richard Mourdock, a former executive with an Indiana ESOP company, in the Republican primary, there is a proven friend of ESOPs in the running for a seat in the U.S. Senate. There is no question that as of this moment in the U.S., there is really no noticeable ESOP voter. [See, reprinted on the Association’s website the pamphlet, “Why We Do Not Win Every Time: It’s Us, Not Them” for fuller review of impact of no ESOP voters.]
Many ESOP advocates in Indiana have heard Treasurer Mourdock say to general audiences that his belief in ESOPs embodies the epitome of free enterprise that can benefit many, many more Americans. And, he developed a program in Indiana that was instrumental in ESOP creation in eight Indiana companies.
The ESOP community’s interest in this Senate race is not about being against anyone, or being negative towards anyone; it is about being loyal to someone who is extremely pro-ESOP.