Congress Passes Trump's Tax Bill - Industry Bodies Happy
The U.S. Congress has approved a tax bill that slashes taxes for corporations. The bill is now ready to be signed by President Donald Trump who stated: "We are making America great again."
The Tax Cuts and Jobs Act is projected to add nearly $1.5 trillion to the national debt over the coming decade, according to the Joint Committee on Taxation. That figure drops to about $1 trillion when economic growth is accounted for.
The National Ocean Industries Association (NOIA) has applauded the passing of the act, with spokesman Randall Luthi saying: “The passage of long overdue tax reform legislation will open the door to a more competitive America. U.S. businesses and workers, particularly those in the energy industry, are unrivaled in their grit and ingenuity, and they deserve a tax system that provides certainty, clarity and simplicity.
“With today’s vote, American workers can keep more of their hard-earned paychecks and American businesses will be able to reinvest more of their earnings. In other words, the new tax system will increase America’s ability to produce energy and compete globally, bringing more jobs, more investment and more opportunities to our shores.”
The American Association of Port Authorities (AAPA) is pleased that several important tax related policy priorities were addressed in the final version of the act. These included provisions related to tax-exempt bond financing and wind energy production tax credits.
“Public port authorities throughout the country are investing billions of dollars in needed infrastructure improvements. With private activity bonds (PABs) providing a significant source of financing for these projects, AAPA worked with several transportation and bond-related coalitions to strongly advocate against the elimination of tax exempt status for PABs. We’re extremely pleased that the final legislation keeps the tax-exempt status for PABs. This provision will help foster investments, not just in and around ports, but also in needed infrastructure development throughout the nation,” said Kurt Nagle, AAPA’s president and CEO.
It was estimated that ports would have had to pay approximately $19 million in extra debt service costs for every $100 million borrowed had the PAB tax exemption been lost.
Another “win” for ports and for all engaged in wind energy in the final legislation was the continuation of the existing level of wind energy production tax credits. The original House bill would have reduced the tax credit level. A sizable number of ports on the east, gulf, and west coasts and the Great Lakes handle wind energy components as part of their cargo mix.
AAPA also expressed appreciation to Senate leadership for dropping a provision in their version of the bill that would have placed a new tax on international cruise lines that call at U.S. ports.
In addition, AAPA had supported the House bill’s repeal of the alternative minimum tax (AMT). This is important since most PABs issued by ports are subject to the AMT, and therefore, increases the cost of financing. In the final bill, Congress repealed the AMT for corporations, but retained it in a modified form for higher-income individuals.
The association, along with other groups, had also urged continuation of the tax-exemption on advance refunding of municipal bonds. However, the final legislation takes away the tax-exempt status of advance refunding, which is likely to increase the cost of public infrastructure investments.