Category: Company and Industry News

In March, the Like-Kind Exchange Coalition, comprised of representatives from real estate, equipment rental, car rental, energy and QI organizations met in Washington D.C. with two purposes. The first was to announce the results of the comprehensive E&Y study examining the impact a repeal of 1031 like-kind exchanges would have on the economy. The second was to schedule as many meetings possible with members of the Senate Finance and House Ways & Means committees during the three days that we were in D.C. The number of meetings turned out to be 60 and included meetings the Chief of Staff of the Senate Finance Committee, chaired by Senator Orin Hatch, and the E&Y study, shrinks GDP by $8 billion to $13 billion per year.
The 1031taxreform.com/join-campaign. The impact realized from this three-minute effort is exponential.
Involve Your Industry Associations
I also encourage you to contact your industry-specific associations and ask them what they are doing to help ensure that like-kind exchanges are retained. We’re surprised to find several national associations downplaying or altogether ignoring the impact that 1031 repeal would have on their members, a stance that stems from corporate willingness to sacrifice anything, like-kind exchanges included, for a decrease in the corporate tax rate. What’s missing from this notion however, is the understanding that 93% of American businesses are sole proprietorships that file at an individual tax rate and won’t benefit from a corporate-only tax reform strategy that dismisses 1031s.
If 1031s are important to your business, and you believe your association should be involved in their preservation, let them know.

In March, the Like-Kind Exchange Coalition, comprised of representatives from real estate, equipment rental, car rental, energy and QI organizations met in Washington D.C. with two purposes. The first was to announce the results of the comprehensive E&Y study examining the impact a repeal of 1031 like-kind exchanges would have on the economy. The second was to schedule as many meetings possible with members of the Senate Finance and House Ways & Means committees during the three days that we were in D.C. The number of meetings turned out to be 60 and included meetings the Chief of Staff of the Senate Finance Committee, chaired by Senator Orin Hatch, and the E&Y study, shrinks GDP by $8 billion to $13 billion per year.
The 1031taxreform.com/join-campaign. The impact realized from this three-minute effort is exponential.
Involve Your Industry Associations
I also encourage you to contact your industry-specific associations and ask them what they are doing to help ensure that like-kind exchanges are retained. We’re surprised to find several national associations downplaying or altogether ignoring the impact that 1031 repeal would have on their members, a stance that stems from corporate willingness to sacrifice anything, like-kind exchanges included, for a decrease in the corporate tax rate. What’s missing from this notion however, is the understanding that 93% of American businesses are sole proprietorships that file at an individual tax rate and won’t benefit from a corporate-only tax reform strategy that dismisses 1031s.
If 1031s are important to your business, and you believe your association should be involved in their preservation, let them know.

This interview is one in a series in which we’ve asked an industry leader questions on the topic of tax reform and the issues faced by Congress in addressing the tax code.
Michael Tuchman is a partner in

This interview is one in a series in which we’ve asked an industry leader questions on the topic of tax reform and the issues faced by Congress in addressing the tax code.
Michael Tuchman is a partner in

This interview is one in a series in which we’ve asked an industry leader questions on the topic of tax reform and the issues faced by Congress in addressing the tax code.
Michael Tuchman is a partner in

On Tuesday, March 17, the Section 1031 Like-Kind Exchange Coalition released the http://www.1031taxreform.com/1031economics/”>results of a study that examines the impact of the repeal of 1031 like-kind exchanges (LKEs). The study, which was conducted by Ernst & Young, concluded that the impact of 1031 repeal would be a slowing of economic growth and a reduction in GDP.
In an event that took place at the House of Representatives’ Longworth House Office Building, eight speakers from diverse industries spoke about their experiences with like-kind exchanges. http://www.1031taxreform.com/1031bios/#TThompson”>Tracy Thompson, CFO of Yellowhouse Machinery Company discussed the economic benefits of like-kind exchanges and the detrimental impact their repeal would have on family-owned businesses. Jesco’s http://www.1031taxreform.com/1031bios/#GBlaszka”>Greg Blaszka similarly spoke about growth attributable to like-kind exchanges. Other speakers included http://www.1031taxreform.com/1031bios/#DWagner”>Dan Wagner, Senior Vice President of Government Relations at the Inland Real Estate Group, and http://www.1031taxreform.com/1031bios/#CRoider”>Carrie Roider, CEO of Erb Equipment Company.
Robert Carroll, National Director of Ernst and Young’s Quantitative Economics and Statistics (QUEST) practice and former Deputy Assistant Secretary of the Treasury for Tax Analysis, detailed the macroeconomic analysis the impacts a potential LKE repeal would have on GDP, including an increase to the cost of capital, labor productivity drop-off, and an increase in holding periods of business assets by roughly 40%.
“The key source of these estimated impacts is the finding that the repeal of the like-kind exchange provisions, even when paired with a revenue neutral reduction in the corporate income tax rate, increases the cost of capital for business investment,” the study states. “The higher cost of capital not only discourages investment, but also reduces the velocity of investment through longer holding periods, whereby business investment is locked into specific investment for a longer period of time, and greater reliance on debt financing.”
Also in attendance were David Fowler, who Leads PwC’s LKE Practice, Accruit CEO, Brent Abrahm, and President of the Federation of Exchange Accommodators, Mary Cunningham, as well as Brian McGuire, President of the Associated Equipment Distributors (AED), Bob Henderson, the AED’s EVP and COO, and Christian Klein, Vice President of Government Affairs of the AED.
“Like-kind exchanges allow domestic businesses to efficiently expand and prosper, timulating economic growth. Most importantly, it is used by a wide array of businesses including farmers, commercial real estate investors, construction companies, trucking and transporation companies as well as small family owned businesses that invest in real estate and vehicles,” said Ms. Cunningham.
The http://www.1031taxreform.com/1031economics/”>findings of the Ernst & Young Section 1031 Economic Study and the http://www.1031taxreform.com/1031press-release/”>press release are both available at http://www.1031taxreform.com/1031economics/”>1031taxreform.com/1031econ…;

From Left to Right: Brent Abrahm, Tracy Thompson, Christian Klein, David Fowler, Greg Blaszka, Carrie Roider

On Tuesday, March 17, the Section 1031 Like-Kind Exchange Coalition released the http://www.1031taxreform.com/1031economics/”>results of a study that examines the impact of the repeal of 1031 like-kind exchanges (LKEs). The study, which was conducted by Ernst & Young, concluded that the impact of 1031 repeal would be a slowing of economic growth and a reduction in GDP.
In an event that took place at the House of Representatives’ Longworth House Office Building, eight speakers from diverse industries spoke about their experiences with like-kind exchanges. http://www.1031taxreform.com/1031bios/#TThompson”>Tracy Thompson, CFO of Yellowhouse Machinery Company discussed the economic benefits of like-kind exchanges and the detrimental impact their repeal would have on family-owned businesses. Jesco’s http://www.1031taxreform.com/1031bios/#GBlaszka”>Greg Blaszka similarly spoke about growth attributable to like-kind exchanges. Other speakers included http://www.1031taxreform.com/1031bios/#DWagner”>Dan Wagner, Senior Vice President of Government Relations at the Inland Real Estate Group, and http://www.1031taxreform.com/1031bios/#CRoider”>Carrie Roider, CEO of Erb Equipment Company.
Robert Carroll, National Director of Ernst and Young’s Quantitative Economics and Statistics (QUEST) practice and former Deputy Assistant Secretary of the Treasury for Tax Analysis, detailed the macroeconomic analysis the impacts a potential LKE repeal would have on GDP, including an increase to the cost of capital, labor productivity drop-off, and an increase in holding periods of business assets by roughly 40%.
“The key source of these estimated impacts is the finding that the repeal of the like-kind exchange provisions, even when paired with a revenue neutral reduction in the corporate income tax rate, increases the cost of capital for business investment,” the study states. “The higher cost of capital not only discourages investment, but also reduces the velocity of investment through longer holding periods, whereby business investment is locked into specific investment for a longer period of time, and greater reliance on debt financing.”
Also in attendance were David Fowler, who Leads PwC’s LKE Practice, Accruit CEO, Brent Abrahm, and President of the Federation of Exchange Accommodators, Mary Cunningham, as well as Brian McGuire, President of the Associated Equipment Distributors (AED), Bob Henderson, the AED’s EVP and COO, and Christian Klein, Vice President of Government Affairs of the AED.
“Like-kind exchanges allow domestic businesses to efficiently expand and prosper, timulating economic growth. Most importantly, it is used by a wide array of businesses including farmers, commercial real estate investors, construction companies, trucking and transporation companies as well as small family owned businesses that invest in real estate and vehicles,” said Ms. Cunningham.
The http://www.1031taxreform.com/1031economics/”>findings of the Ernst & Young Section 1031 Economic Study and the http://www.1031taxreform.com/1031press-release/”>press release are both available at http://www.1031taxreform.com/1031economics/”>1031taxreform.com/1031econ…;

From Left to Right: Brent Abrahm, Tracy Thompson, Christian Klein, David Fowler, Greg Blaszka, Carrie Roider

On Tuesday, March 17, the Section 1031 Like-Kind Exchange Coalition released the http://www.1031taxreform.com/1031economics/”>results of a study that examines the impact of the repeal of 1031 like-kind exchanges (LKEs). The study, which was conducted by Ernst & Young, concluded that the impact of 1031 repeal would be a slowing of economic growth and a reduction in GDP.
In an event that took place at the House of Representatives’ Longworth House Office Building, eight speakers from diverse industries spoke about their experiences with like-kind exchanges. http://www.1031taxreform.com/1031bios/#TThompson”>Tracy Thompson, CFO of Yellowhouse Machinery Company discussed the economic benefits of like-kind exchanges and the detrimental impact their repeal would have on family-owned businesses. Jesco’s http://www.1031taxreform.com/1031bios/#GBlaszka”>Greg Blaszka similarly spoke about growth attributable to like-kind exchanges. Other speakers included http://www.1031taxreform.com/1031bios/#DWagner”>Dan Wagner, Senior Vice President of Government Relations at the Inland Real Estate Group, and http://www.1031taxreform.com/1031bios/#CRoider”>Carrie Roider, CEO of Erb Equipment Company.
Robert Carroll, National Director of Ernst and Young’s Quantitative Economics and Statistics (QUEST) practice and former Deputy Assistant Secretary of the Treasury for Tax Analysis, detailed the macroeconomic analysis the impacts a potential LKE repeal would have on GDP, including an increase to the cost of capital, labor productivity drop-off, and an increase in holding periods of business assets by roughly 40%.
“The key source of these estimated impacts is the finding that the repeal of the like-kind exchange provisions, even when paired with a revenue neutral reduction in the corporate income tax rate, increases the cost of capital for business investment,” the study states. “The higher cost of capital not only discourages investment, but also reduces the velocity of investment through longer holding periods, whereby business investment is locked into specific investment for a longer period of time, and greater reliance on debt financing.”
Also in attendance were David Fowler, who Leads PwC’s LKE Practice, Accruit CEO, Brent Abrahm, and President of the Federation of Exchange Accommodators, Mary Cunningham, as well as Brian McGuire, President of the Associated Equipment Distributors (AED), Bob Henderson, the AED’s EVP and COO, and Christian Klein, Vice President of Government Affairs of the AED.
“Like-kind exchanges allow domestic businesses to efficiently expand and prosper, timulating economic growth. Most importantly, it is used by a wide array of businesses including farmers, commercial real estate investors, construction companies, trucking and transporation companies as well as small family owned businesses that invest in real estate and vehicles,” said Ms. Cunningham.
The http://www.1031taxreform.com/1031economics/”>findings of the Ernst & Young Section 1031 Economic Study and the http://www.1031taxreform.com/1031press-release/”>press release are both available at http://www.1031taxreform.com/1031economics/”>1031taxreform.com/1031econ…;

From Left to Right: Brent Abrahm, Tracy Thompson, Christian Klein, David Fowler, Greg Blaszka, Carrie Roider

This interview is one in a series in which we’ve asked an industry leader questions on the topic of tax reform and the issues faced by Congress in addressing the tax code.
Scott Goodman is the Founding Principal of PKD Foundation and Chicago Economics Club.
What are your thoughts on Congress allocating significant time and resources to tax reform in 2015?
Congress’s attention to tax reform is long overdue.  The tax code is just a series of layers on top of layers of  either revenue generators or incentives which have relevance at the time they are enacted, but are not adequately reviewed over time.    The fact that a majority of Americans are not capable of preparing their own tax returns is testament to the fact that the tax code is too complicated. This seems almost unconstitutional.
Do you think Congress should address corporate-only or comprehensive tax reform, and why?
Congress should undertake comprehensive tax reform.  The U.S. is falling way behind in the condition of our infrastructure, whether it be the existing conditions of our roads, bridges, and electrical grid, or the need to build new wireless networks or fiber lines.  Obviously our national debt needs to be addressed as well.  Comprehensive tax reform can at once simplify our tax code and raise needed revenues for public projects.
The upper end of the tax rate for U.S. corporations is 35% and the individual rate is pushing 40% for federal and state taxes alone. Should that be cut and do you think individuals and/or corporations would be willing to give up popular tax incentives to do so?
I do not think the tax rates for corporations or individuals should be cut. In fact, greater distribution of wealth is exactly what is needed to give our economy a chance of fortifying the middle class.  Current policies have created a clear ”have/have not” society in America, and this is dangerous.  Corporate incentives should be scrutinized.
Many industries receive tax credits that are excessive and probably unnecessary. As for eliminating some of the popular incentives, again, they should be scrutinized.  Because they are intended to affect behavior, we should analyze the tax incentives to be sure that the type of behavior they were intended to affect is still (a) effective (b) relevant, and (c) worth the cost of revenue loss.
What part of your business would be impacted most by a repeal of 1031 exchanges and why?
In the past, we used 1031 exchanges often.  Today, we utilize them less frequently because the ownership structure of our deals has become more complex.  Repeal of 1031 exchanges would, in certain instances, affect our ability to purchase certain properties because oftentimes property owners will only sell if they can trade into new properties and defer taxes.
How can Washington simplify the tax code?
Obviously a flat tax or a tax code devoid of deductions, special treatments and credits would be simpler; I’m just not sure it would be better.  The tax code is too voluminous.  Layers and layers of new taxes and provisions have been added over time, many cowing to special interests, many which have added to the complexity without fixing or amending the problems they were meant to address.
Time to start over. The tax code should be made fair and balanced, readable and understandable, easily compliable and accessible.
Are there certain parts of the tax code today that would dramatically change your business should they be repealed?
I am sure there are, but I am not familiar or knowledgeable  enough to comment.
Are you concerned by the recent spike in inversions undergone by U.S. corporations?
No, not concerned, but this loophole should be closed.

This interview is one in a series in which we’ve asked an industry leader questions on the topic of tax reform and the issues faced by Congress in addressing the tax code.
Scott Goodman is the Founding Principal of PKD Foundation and Chicago Economics Club.
What are your thoughts on Congress allocating significant time and resources to tax reform in 2015?
Congress’s attention to tax reform is long overdue.  The tax code is just a series of layers on top of layers of  either revenue generators or incentives which have relevance at the time they are enacted, but are not adequately reviewed over time.    The fact that a majority of Americans are not capable of preparing their own tax returns is testament to the fact that the tax code is too complicated. This seems almost unconstitutional.
Do you think Congress should address corporate-only or comprehensive tax reform, and why?
Congress should undertake comprehensive tax reform.  The U.S. is falling way behind in the condition of our infrastructure, whether it be the existing conditions of our roads, bridges, and electrical grid, or the need to build new wireless networks or fiber lines.  Obviously our national debt needs to be addressed as well.  Comprehensive tax reform can at once simplify our tax code and raise needed revenues for public projects.
The upper end of the tax rate for U.S. corporations is 35% and the individual rate is pushing 40% for federal and state taxes alone. Should that be cut and do you think individuals and/or corporations would be willing to give up popular tax incentives to do so?
I do not think the tax rates for corporations or individuals should be cut. In fact, greater distribution of wealth is exactly what is needed to give our economy a chance of fortifying the middle class.  Current policies have created a clear ”have/have not” society in America, and this is dangerous.  Corporate incentives should be scrutinized.
Many industries receive tax credits that are excessive and probably unnecessary. As for eliminating some of the popular incentives, again, they should be scrutinized.  Because they are intended to affect behavior, we should analyze the tax incentives to be sure that the type of behavior they were intended to affect is still (a) effective (b) relevant, and (c) worth the cost of revenue loss.
What part of your business would be impacted most by a repeal of 1031 exchanges and why?
In the past, we used 1031 exchanges often.  Today, we utilize them less frequently because the ownership structure of our deals has become more complex.  Repeal of 1031 exchanges would, in certain instances, affect our ability to purchase certain properties because oftentimes property owners will only sell if they can trade into new properties and defer taxes.
How can Washington simplify the tax code?
Obviously a flat tax or a tax code devoid of deductions, special treatments and credits would be simpler; I’m just not sure it would be better.  The tax code is too voluminous.  Layers and layers of new taxes and provisions have been added over time, many cowing to special interests, many which have added to the complexity without fixing or amending the problems they were meant to address.
Time to start over. The tax code should be made fair and balanced, readable and understandable, easily compliable and accessible.
Are there certain parts of the tax code today that would dramatically change your business should they be repealed?
I am sure there are, but I am not familiar or knowledgeable  enough to comment.
Are you concerned by the recent spike in inversions undergone by U.S. corporations?
No, not concerned, but this loophole should be closed.