Issues & AdvocacyFederal
AIA Offers Tax Reform Recommendations to Capitol Hill
By Andrew Goldberg, Managing Director, Government Relations & Outreach
As millions of Americans file their taxes today, the AIA presented to Congressional policymakers its recommendations on ways to reform the U. S. tax code to make it fairer, simpler, and create more economic opportunity.
Republicans and Democrats alike have expressed support for undertaking the first major reform of the U.S. tax code in nearly three decades, although the parties diverge on the best way to accomplish this. The Ways and Means Committee, which oversees tax policy in the U.S. House, has developed a set of working groups to examine various issues in the tax code.
The AIA's statement comes after significant discussion with and input from AIA members, industry stakeholders, and policymakers. AIA government relations staff have met with many of the House members who are on the tax reform working groups to educate them about the role of architects in the economy.
The AIA’s statement identifies three broad principles that it believes must be a part of any successful comprehensive tax reform:
• Preserve tax policies that support and strengthen small businesses, which account for the vast majority of U.S. architecture firms;
• Consider tax policies that support innovative, economically vibrant sustainable, and resilient buildings and communities; and
• Ensure fairness in the tax code.
Noting that nearly all architecture firms are small businesses, with a significant portion organized as pass-through entities (such as S corporations, partnerships and sold proprietorships) whose partners pay taxes at the individual level, the AIA is urging Congress to enact comprehensive tax reform that addresses both the corporate and individual tax rates.
In addition, the AIA is recommending that Congress consider tax policies that support innovative, economically vibrant, sustainable, and resilient buildings and communities. The current tax code contains a number of important tax provisions that impact the built environment generally, such as the home mortgage interest deduction, tax-exempt bond financing, the Low-Income Housing Tax Credit, historic preservation incentives and energy efficiency tax incentives. Recognizing that some or all of these provisions might be changed in tax reform, the AIA nevertheless urges policymakers to recognize the important role that such incentives play in financing design and construction projects.
The comments that the AIA and other stakeholders provide to Congress will be analyzed by the nonpartisan Joint Committee on Taxation, which will provide a final report to the Ways and Means Committee on May 6. After that, the outlook for tax reform is still unclear, and will depend in large part on the negotiations between Congress and the White House on budget and deficit reduction measures.
The AIA continues to monitor the progress of tax reform in Washington and is working with its allies in the design and construction industry in making sure that policymakers understand the ramifications of changes in the tax code on the building industry.
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