the nmtc in the landscape of tax reform · week of oct. 16 full senate consideration of fy18 budget...
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The NMTC in the Landscape of Tax ReformPANELISTS
Michael NovogradacNovogradac & Company LLP
Merrill HoopengardnerNTCIC
Jeff McMillenAkin Gump Strauss Hauer & Feld LLP
Bob RapozaRapoza Associates
@Novogradac
@bobrapoza
@NTCIC
Agenda
Unified Tax Reform Framework
What’s the Plan?
Advocacy
Recent Presidents Who Had Major Tax Bills the Year of their Inauguration
OBAMABUSHCLINTONBUSHREAGANCARTER TRUMP
?
“The framework explicitly preserves business credits in two areas where tax incentives have proven to be effective in promoting policy goals important in the American economy: research and development (R&D) and low-income housing. While the framework envisions repeal of other business credits, the committees may decide to retain some other business credits to the extent budgetary limitations allow.”
Big 6 Tax Reform Framework
20%Top corporate
rateAims to eliminate
Corporate AMT
25%Pass-through
rate
FULLExpensing eligible
2017-2022effective 9/27/2017, not applied
to buildings
Business
Big 6 Tax Reform Framework
• LIHTC and R&D explicitly retained• Committees encouraged to examine corporate dividend
payment deduction to reduce double taxation of profits
Business
Big 6 Tax Reform Framework
• Individual rates of 12%, 25%, and 35%, with flexibility to add a fourth bracket for higher incomes
• Doubled standard deduction
• Larger child tax credit and $500 credit for non-child dependents
• Individual AMT and estate tax repealed
Individual
Big 6 Tax Reform Framework
• Mortgage interest and charitable giving incentives explicitly retained
• Municipal bond income exemption retained, but unclear on private activity bonds
• State & local tax deduction and most other itemized deductions repealed
• “Committees are encouraged to retain tax incentives for higher education, retirement, and work”
According to Mark Calabria, Chief Economist for VP Pence, private activity bond tax exemption is retained.
Individual
Big 6 Tax Reform Framework
• Territorial int’l tax system with repatriation tax rates for accumulated liquid and illiquid assets
• Base erosion rules to protect the tax base
International
OCT NOV DEC
SENATE IN SESSION: 36 days
HOUSE IN SESSION: 28 days
The PlanOct. 5• Senate Budget Committee marked up
its FY18 budget resolution • House voted on its FY18 resolution
Week of Oct. 16Full Senate consideration of FY18 Budget resolution
House and Senate resolve
differences
Dec. 14/15Currently scheduled to adjourn for the holidays
Full house
takes up tax
reform
Full Senate considers tax reform
Tentative Oct. 31 Ways and Means markup of Tax Reform
Dec. 8CR expiresTemporary extension of NFIP expires
Tentative week of Nov 13 Senate Finance Committee considers tax reform
until they get punched in the mouth.
Everyone has a plan…
Advocacy
Permanency for the NMTC?
Permanency
Inflation adjustment
Offset against the AMT
Permanency for the NMTC?
BLUNT CARDIN
6R 6D(includes 5 out of 26 Senate Finance
Committee members)As of October 18, 2017
Permanency for the NMTC?
35R 45D(includes 23 out of 40 Ways and Means members)
TIBERI NEAL REED
As of October 18, 2017
NMTC Coalition Goals for Tax Reform (Ranked)
1. Avoid repeal of the final two years of NMTC authority
2. Survival (the tax bill omits mention of the NMTC)
3. Long-term or indefinite extension
4. Long-term or indefinite extension with increase in allocation authority, aka, the NMTC Extension Act of 2017– House: H.R. 1098 (Tiberi/Neal/Reed):
• 81 cosponsors, including 12 of the 24 Republicans on Ways & Means
– Senate: S. 384 (Blunt/Cardin): • 13 cosponsors including Senator Portman (R-OH) on Finance
NMTC Coalition Strategy
BUILD CONGRESSIONAL SUPPORT
Summer Cosponsorship DriveOver 400 calls, emails, and letters to House and Senate offices from NMTC supporters
RALLY THE GRASSROOTSBusiness sign-on letter2,120 signatures
HIGHLIGHT SUCCESSESEconomic Impact ReportNew report coming soon
ENGAGE CONGRESSIONAL SUPPORTERS
Fall OutreachEngaging Congressional NMTC supporters, encouraging them to weigh in with the tax-writing committees
Disaster Relief
Hurricane(s)Total damage (estimate)
Damage to commercial structures & equipment (estimate)
NMTC allocation authority
Estimated cost of the NMTC to the fed. government
Katrina $197,000 $71,000 $1,000 $260
Harvey $218,600 $79,800 $1,113
Irma $53,800 $21,800 $307
Maria $56,500 $44,400 $625
Harvey, Maria, and Irma $328,400 $146,000 $2,056 $535
Comparing damage estimates, (2017 dollars, millions):
nmtccoalition.org/disaster
2017 NMTC Progress ReportTrends: • Healthcare
• Incubators
Other highlights• Updated Rural Report
(2003-2014)
• Interactive tablet-friendly version available
Jobs and investment• 36k jobs• $3 billion in total project
financing• Survey covers 80% of all
NMTC 2016 activity
Leading industries 1) Healthcare2) Manufacturing
Communities• 22% non-metro• 76% severe distress
www.newmarketscredits.com
www.newmarketscredits.com
How to Contact Congress
Jill [email protected] NMTCs
1 Drop your business card into the fishbowl at the New Markets Tax Credit Coalition table.
How to Contact Congress
2You’ll receive an email from the Coalition with the contact information of who you should contact and a form letter with blanks you can fill in.
How to Contact Congress
4 Return to the Coalition booth to pick up your badge sticker
Jill SmithABC NMTCs
The NMTC in the Landscape of Tax ReformPANELISTS
Michael NovogradacNovogradac & Company LLP
Merrill HoopengardnerNTCIC
Jeff McMillenAkin Gump Strauss Hauer & Feld LLP
Bob RapozaRapoza Associates
@Novogradac
@bobrapoza
@NTCIC