TRALA Highlights Tax Reform Priorities with U.S. Senate
TRALA has submitted written comments to the U.S. Senate Finance Committee highlighting its stance on a handful of key tax provisions, in response to the Senate Finance Committee's open invitation for interested parties to submit their opinions on federal tax reform. Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) had previously announced that they desired to receive feedback from interested parties by April 15, so that the Committee can consider all comments before the potential introduction of federal tax reform legislation which would ideally incorporate suggestions into the legislation later this year.
TRALA's comments state that for federal tax reform to be truly comprehensive, it should lower individual rates as well as corporate tax rates. Almost all TRALA members are pass-through entities, meaning that their taxes are paid at the individual rates. If income tax rates are lowered for large traditional C-corporations and individual rates are untouched, forcing many TRALA member companies to pay at the marginal tax rate of 39.6%, it would "put those companies at a competitive disadvantage, creating a situation where pass-through entities' investment and job creation would be severely impacted," TRALA's comments state.
TRALA also urges the tax-writing committee to preserve Like-Kind Exchanges (LKEs) for tangible personal property, something that is currently authorized by Section 1031 of the tax code. This provision allows taxpayers to defer gain from the sale of an old piece of equipment and put it towards the purchase of new equipment. TRALA's comments highlight its belief that LKEs incentivize the purchase of new, safe, clean trucks that will be put into service, which in turn maintains a demand for manufacturing jobs.
TRALA's comments also state its belief that current depreciation provisions known as Modified Accelerated Cost Recovery System (MACRS), or simply accelerated depreciation, are beneficial to TRALA members and the overall economy. "Accelerated depreciation allows for a company to depreciate a greater value upfront and eliminating this ability would be a disincentive to purchase vehicles, trailers and equipment," the document states.
TRALA's comments also state that Congress should preserve the ability for businesses to deduct interest on their debt payments, as the prohibition of that practice would slow the purchase of new trucks. Treating debt and equity as the same would force companies to purchase thousands of vehicles on equity alone and that would result in either the collapse of many businesses or a significant increase in lease and rental costs to consumers.
Finally, TRALA comments support existing and expired tax credits for the purchase of alternative fuel, the vehicles powered by such fuel, and for the building of infrastructure needed to bring natural gas and other alternative fuels to the end users.