As Congress and the Administration work toward their mutual goal of passing comprehensive tax reform and a new infrastructure initiative, AGC continues to make the case to leaders on Capitol Hill that rebuilding our nation’s infrastructure and reforming our outdated tax code should go hand-in-hand.  Many Republicans and Democrats in Congress agree that combining tax and infrastructure reform into one package makes perfect sense.  In fact, members of both parties in the House of Representatives sent President Trump a letter earlier this year expressing their support in pursuing an infrastructure and tax reform package, saying “comprehensive tax reform could free up significant capital for infrastructure as well as other investments enabling businesses large and small to invent, innovate and hire.
AGC continues to advocate for reforms to the tax code that would benefit the construction industry, and recently sent a letter to the Senate Finance Committee outlining those priorities.  But, including infrastructure in tax reform would have a positive impact on economic growth in the short and long term.  In the short term, a recent report by the Congressional Budget Office noted, every dollar invested in infrastructure, on average, generates as much as $2.50 in incremental output over the following six quarters.  This is the highest multiplier among all major Federal spending programs or from tax cuts to individuals and businesses.  In the long-term, infrastructure investments can boost our economy by creating significantly more new and high-paying jobs in construction and related fields.  These investments will also make businesses more competitive by reducing shipping, commuting, water and energy costs.
At AGC’s upcoming National Chapter Leader Conference (NCLC) – September 24-26 – participants will be going to Capitol Hill to make the case that infrastructure investment should be a part of tax reform.  Among AGC’s infrastructure priorities are to find a permanent fix for the Highway Trust Fund, maintain the tax exempt status of municipal bonds, ensure and expand the use of Private Activity Bonds, establish a Clean Water Trust Fund, increase funding for airport infrastructure, and make better use of federal buildings and property.
For more information, contact Sean O’Neill at [email protected] or (202) 547-8892.

Tell your Rep. to Sign Bipartisan Letter in Support of Long-Term Fix – DEADLINE TODAY
A bipartisan group of members of the House of Representatives are circulating a letter asking House Ways & Means Committee Chairman Kevin Brady (R-Texas) and Ranking Democrat Richard Neal (Mass.) to fix the Highway Trust Fund as a part of any tax reform package the committee considers. Contact your representative and urge them to sign this letter, which is being circulated by Transportation & Infrastructure Subcommittee on Highways and Transit Chairman Sam Graves (R-Mo.) and Ranking Democrat Eleanor Holmes Norton (District of Columbia).  As of press time, 156 members of the House have signed onto the Graves/Holmes Norton letter (check to see if your representatives has signed on).
If you recall, Representatives Graves and Holmes Norton circulated a similar letter last year (check here to see if your Rep. signed the 2016 letter) that was signed by 130 bipartisan members of the House. The FAST ACT provides funding certainty for the Highway Trust Fund through fiscal year 2020.  However, following the FAST Act's expiration, the Highway Trust Fund will face cuts of approximately $18 billion per year.  A permanent fix for the Highway Trust Fund needs to be found in order to eliminate these cuts.
For more information, contact Sean O’Neill at [email protected] or (202) 547-8892.

Tell your Rep. to Sign Bipartisan Letter to Support a Long-Term Highway Trust Fund Fix
As the push continues for Congress to fix the Highway Trust Fund, a bipartisan group of members of the House of Representatives are circulating a letter calling for a permanent Highway Trust Fund fix to be included in any tax reform package. If you recall, Representatives Graves and Holmes-Norton circulated a similar letter last year (check here to see if your Rep. signed the 2016 letter) that was signed by 130 bipartisan members of the House. Help us to significantly increase that number by contacting your Representative and asking them to sign on to the Graves/Holmes-Norton letter. So far, 91 members of the House have signed onto the letter.  See if your member has signed on and, if so, send an email thanking them for their support.
The FAST ACT provides funding certainty for the Highway Trust Fund through fiscal year 2020.  However, following the FAST Act's expiration, the Highway Trust Fund will face cuts of approximately $18 billion per year.  A permanent fix for the Highway Trust Fund needs to be found in order to eliminate these cuts.
The letter – which is being circulated by Transportation & Infrastructure Subcommittee on Highways and Transit Chairman Sam Graves (R-Mo.) and Ranking Democrat Eleanor Holmes Norton (District of Columbia) – is asking House Ways & Means Committee Chairman Kevin Brady (R-Texas) and Ranking Democrat Richard Neal (Mass.) to fix the Highway Trust Fund in any tax reform package that the committee considers.
For more information, contact Sean O’Neill at [email protected].

Tell your Rep. to Sign Bipartisan Letter to Support a Long-Term Highway Trust Fund Fix
As the push continues for Congress to fix the Highway Trust Fund, a bipartisan group of members of the House of Representatives are circulating a letter calling for a permanent Highway Trust Fund fix to be included in any tax reform package. If you recall, Representatives Graves and Holmes-Norton circulated a similar letter last year (check here to see if your Rep. signed the 2016 letter) that was signed by 130 bipartisan members of the House. Help us to significantly increase that number by contacting your Representative and asking them to sign on to the Graves/Holmes-Norton letter.
The FAST ACT provides funding certainty for the Highway Trust Fund through fiscal year 2020.  However, following the FAST Act's expiration, the Highway Trust Fund will face cuts of approximately $18 billion per year.  A permanent fix for the Highway Trust Fund needs to be found in order to eliminate these cuts.
The letter – which is being circulated by Transportation & Infrastructure Subcommittee on Highways and Transit Chairman Sam Graves (R-Mo.) and Ranking Democrat Eleanor Holmes Norton (District of Columbia) – is asking House Ways & Means Committee Chairman Kevin Brady (R-Texas) and Ranking Democrat Richard Neal (Mass.) to fix the Highway Trust Fund in any tax reform package that the committee considers.
For more information, contact Sean O’Neill at [email protected] or (202) 547-8892.

This week, President Trump released his long-awaited proposal to cut taxes. Both Trump’s proposal and the previously-released House blueprint for tax reform have commonalities with AGC’s goals for tax reform.  There is still a long way to go before tax reform is reality, but AGC believes Republicans in Congress and the President are at a good starting point.
AGC goals include: lower rates, simplification, permanency, fund and finance infrastructure, eliminate AMT, eliminate Death Tax, and reform C-corps and pass-through companies simultaneously.
The chart below shows where the president’s plan and the House proposal align with AGC’s goals (and where they do not).

AGC Tax Reform Goals	Trump Plan Elements	House Tax Plan Outline
Lower Rates Individuals	10-25-35%	12-25-33%
Lower Rates Corporations	15%	20% C Corps, 25% S Corps
Simplification	Fewer brackets, fewer deductions, repeal of AMT	Fewer brackets, fewer deductions, repeal of AMT
Permanency	No	Likely not
Fund and Finance Infrastructure	No direct mention	No mention and GOP leadership currently opposed
Eliminate AMT	Eliminated	Eliminated
Eliminate Death Tax	Eliminated	Eliminated
Reform for C Corps and S Corps simultaneously	Yes	Yes

 
Rate reduction is baked in and simplification is a focus of all proposals on the table today. However, there is still much work to be done on ensuring Congress connects tax reform with infrastructure investment. Fixing the Highway Trust Fund and providing funding for infrastructure in conjunction with tax reform is the main focus of the Transportation Construction Coalition Fly-In, May 16-17, 2017.
Additionally, there is still a lot of fine tuning that must be worked out including, determining whether repeal of the Death Tax will include a step-up in basis or how the president’s plan will differentiate between business income and wages. The president’s plan also did not specify his position on tax exempt municipal debt. Stay tuned.
For more information, contact Jeff Shoaf at [email protected] or (202) 547-3350.

It has been over 30 years since a wholesale revamp of the tax code has taken place. With full control of the federal government, Republicans are poised to move tax reform packages through Congress. Buzz is building about a fundamental change to the taxation of businesses through a “cash flow tax” – a tax that is levied on the cash entering the business less the cash leaving – which is included in the House Republican’s Tax Blueprint. This concept currently only applies to c-corporations, remaining silent on the treatment of pass-through (subchapter-S) firms that pay taxes through the individual rate.  However, lawmakers have yet to flesh out many details on the tax plans, and AGC will continue to monitor and analyze proposed changes that will affect our member companies.
For more information, contact Brian Lenihan at [email protected] or (202) 547-4733.