Grant Thornton Q&A with Ways and Means Committee Member Rep. Lynn Jenkins

Mary Moore Hamrick, Public Policy principal at Grant Thornton LLP, interviewed Rep. Lynn Jenkins (R-KS), CPA and member of the Ways and Means Committee, on the outlook for tax reform.

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Hamrick: Why is tax reform a key factor in stimulating jobs and economic growth?

Jenkins: When I talk to families and business owners in Kansas, they frequently discuss their frustrations with high marginal rates, complexity in the code, and uncertainty surrounding temporary provisions. The combination of these issues discourages businesses from growing, innovating and planning ahead. In turn, this keeps America’s economic engine in neutral at a time when we should be powering forward.

Hamrick: As a CPA, you have a unique perspective into business. What reforms do you think will have the greatest impact in driving growth for businesses back home?

Jenkins: First and foremost, we want to achieve lower tax rates. The purpose of pursuing tax reform is to achieve economic growth and prosperity, and no combination of tax incentives will bring this about in the same way that lowering the rates will.

UntitledHamrick: Your constituents consist of small, medium and large businesses, as well as businesses formed as corporations and pass-throughs. What measures are lawmakers taking to ensure tax reform treats all businesses fairly? What are you hearing from your constituents?

Jenkins: This is a difficult area of tax reform, and one that Congress must get right. Congress is acutely aware of the fact that the U.S. has the highest corporate tax rate of any OECD [Organization for Economic Cooperation and Development] country, and this is one of our biggest talking points when discussing the need for reform. However, the corporate tax rate is encapsulating fewer and fewer businesses, as more businesses choose pass-through status instead. We have been educating other members of Congress on this issue so that they understand the individual rate carries greater meaning for many of their businesses back home. My constituents who run pass-through businesses are concerned about parity as tax reform is addressed. They have told me that Congress needs to lower their tax burden alongside the corporate rate to keep the playing field level.

Hamrick: What provisions or part of tax reform do you see as the biggest tax challenge ahead?

Jenkins: The most difficult challenge that the Ways and Means Committee faces is achieving a low rate for businesses. There is a recognition that in order to lower rates, other provisions may have to be sacrificed. This puts Congress in a difficult situation since many businesses rely heavily on provisions in the current tax regime.

Hamrick: Specifically, what tax provisions are most important to you and your constituents?

Jenkins: First and foremost, we want to achieve lower tax rates. Like I said earlier, the purpose of pursuing tax reform is to achieve economic growth and prosperity for our country. Lowering the tax rates is the single most important thing we can do to help create jobs and achieve a healthy economy.

Hamrick: What tax reform provisions do you see moving forward during this Congress?

Jenkins: At this point, it is difficult to predict what lies ahead for tax reform. The Ways and Means Committee did yeoman’s work on its reform effort last Congress, and unfortunately, we could not get the president engaged. For anything to be achieved in the 114th Congress, even though we have a willing Senate, the president must come to the table

Hamrick: Considering the limited window for reform in this Congress, what role do business leaders play in tax reform at this juncture? How can business leaders help/ be a resource to lawmakers during the tax reform discussion?

Jenkins: Business leaders will play a big role in getting anything accomplished. It is important for them to be bending the ears of their members of Congress, and letting them know how much tax reform will positively impact their constituents. There are many members who are committed to getting this done because we know inherently the positive impacts tax reform can have to our country.

 

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