We missed those of you who were unable to join us at last week’s ESCA Leadership Summit where we had a record turnout of 155 ESCA members and guests.
Attendees were privileged to hear from two Members of Congress who play pivotal roles in the tax policy process: Senator Rob Portman (R-OH) and Representative Erik Paulsen (R-MN). It was a treat to hear from Senator Portman, a newly-appointed member of the Senate Finance Committee, but longtime leader on retirement savings policies from his days on the House Ways and Means Committee. He is also a former Administration official who has served as the head of the Office of Management and Budget and as the U.S. Trade Representative, in addition to frequently being on the short lists for the Republican nominee for Vice President or President. Senator Portman has personal experience with pass-throughs/S corps through a family business that his father began. He knows S corp ESOPs well through ESCA Board company Messer Construction and Messer’s Chairman Pete Strange. Portman cautioned ESCA members that “everything should be and will be on the table” in tax reform. However, “you have a great story to tell” and “I will be a champion for S corp ESOPs.”
House Ways and Means Committee member Erik Paulsen spoke at our Thursday conference lunch. Congressman Paulsen is an original sponsor of last Congress’ bill to encourage the creation of more S corp ESOPs. Additionally, he was recently named to the Ways and Means Committee’s tax reform working group on retirement savings policies. Paulsen indicated that he would promote S corp ESOPs in this forum and continue to advocate on our behalf, as Congress confronts numerous fiscal challenges that will require revenue.
ESCA Board Chairman Greg Klein, CFO of Inland Truck Parts, opened conference events by welcoming attendees and recognizing conference sponsors at the kickoff reception on Wednesday evening. Greg’s formal opening remarks on Thursday morning highlighted ESCA’s accomplishments in 2012 from new members to unprecedented support for S corp ESOP legislation and the challenges ahead that we will face together.
Greg then turned over the program to Stephanie Silverman, ESCA’s President & Executive Director, for the political update that set the stage for the rest of the agenda. In short, the policy landscape has become more complex and S corp ESOPs could be looked to as a source of revenue in a number of contexts outside of just tax reform. We are all aware that the sequestration cuts go into effect tomorrow, should Congress fail to reach a solution on spending cuts or raising taxes. As we saw on January 1st when a last minute compromise postponed the deadline for 2 months, the process was ugly and included a large number of tax policies from making permanent the lower rates for all but the highest tax brackets to a permanent fix of the alternative minimum tax and more. Other looming deadlines include the March 27th expiration of funding for the federal government and the need to address the debt ceiling later this year. We continue to see pass-throughs on various lists as revenue raisers and believe that the largest current threat to S corp ESOPs is new taxes on pass-throughs, particularly large pass-throughs. We have of course alerted our congressional allies to these concerns over the past few months and that will be an important message we share on upcoming Hill visits and meetings with Members of Congress back home.
Speaking of visits “back home,” both Senator Portman and Rep. Paulsen encouraged ESCA members to invite their Member of Congress to visit as the absolute best way of promoting an understanding of and support for employee ownership. We hope all of our member companies will invite their Representatives and Senators to visit this year. Please be in touch (email@example.com) to get started today. ESCA will help you with the arrangements from issuing the invitation to getting a date scheduled to prepping you for the visit.
In addition to the congressional speakers, Stephanie’s update and a panel with Alex Brill of conservative think tank American Enterprise Institute, and Karla Walter from the progressive Center for American Progress, attendees participated in the popular peer-to-peer breakout sessions on current issues impacting S corp ESOPs. Finally, after a long day of meetings, attendees had the opportunity to see the new movie, “We the Owners: Employees Expanding the American Dream.” Attendees also enjoyed networking opportunities at the opening reception and dinner events.
If you attended or if you missed this event, we hope you are marking your calendars now for the 2013 Federal Policy Conference & Lobby Day to be held in Washington, DC September 18-20.