NAILBA Perspectives - May/June 2014 - (Page 40)
legislative update
Dead on Arrival
T
he life insurance industry
has been preparing for years
for Congress to pass a comprehensive tax reform bill for the
first time since 1986. Agent associations, concerned that the tax
treatment of life insurance could
be subject to revenue-hungry tax
writers looking to close tax loopholes, have been working together
to advocate vigorously on behalf of
the important financial tools that
provide financial security to 75 million American families.
At this point last year, tax
reform almost seemed like it could
become reality. House Ways and
Means Committee Chairman Rep.
Dave Camp (R-MI) created eleven
bipartisan working groups, each
comprised of Ways and Means Committee members and tasked with
reviewing specific areas of the
current tax code. House Republican leadership supported the
Chairman's efforts and saved the
bill number "H.R. 1" to designate
the legislative importance of tax
reform. The working groups collected public comments and held
roundtable discussions with industry representatives throughout the
first half of 2013, having wrapped
up their work by early summer. The
Ways and Means Committee held
hearings headlined by tax experts.
Chairman Camp hoped to mark-up
a bill by the end of 2013. It is his
last term as Ways and Means Chairman and it was beginning to look
like he would leave behind a legislative legacy of passing a major tax
code overhaul; the last such Chairman to achieve this feat was Rep.
Dan Rostenkowski (D-IL) when Congress passed the Tax Reform Act
of 1986 (passed during mid-term
election season, to boot!).
Alas, the government shutdown
occurred in September, and afterward the appetite for passing any
40 perspectives MAY/JUNE 2014
kind of major legislation quelled.
House leaders who stood behind
Camp's vision were suddenly backtracking. This did not stop Chairman Camp from releasing a tax
reform discussion draft in late February of this year, a draft bill that
would be H.R. 1 but is not even
scheduled for a Committee markup. The discussion draft is viewed
as a foundation on which future
discussions on overhauling the tax
code will be based.
Is the idea of tax reform dead? It
could be more accurately described
as being in a medically-induced
coma as doctors decide the best
course of action; for the rest of
the year, however, it will remain
attached to its feeding tubes.
There is no Member of Congress
that doesn't believe the country is
long overdue for a reform of the tax
code. It's going to happen-it's a
question of when and how, not if.
The primary impediment to "getting
it done" as it relates to tax reform
is partisan gridlock, with Congressional Democrats and Republicans
blaming each other for not allowing
anything to get accomplished.
It is mid-term election season,
and there is a very real chance that
Republicans could take back the
Senate (they are expected to hold
the House). If this is the case, they
will be in a good position to pass
legislation reflective of their priorities beginning in 2015. However, if
they were serious about any legislation becoming law, it would need
to be tailored to meet a 60-vote
threshold for cloture in the Senate so that the Senate can move
the bill (any Republican majority in the Senate would be slim, so
they will need some support from
Democrats to get anything done).
Even if Senate Republicans were
to invoke another "nuclear option"
and eliminate the 60-vote thresh-
old needed to vote on legislation
(Senate Majority Leader Harry Reid
pushed the red button last autumn,
but only for Federal court nominees
and presidential appointments),
the legislation would still need to
get the President's approval, and
it is inconceivable that Republicans would command the two-thirds
majority necessary in both houses
to override a Presidential veto. Furthermore, the hypothetical Republican majority in both the Senate and
the House could be short-lived as
2016 is expected to be an extremely tough year for Republicans in
both Congressional and Presidential races; therefore any major legislation they can point to (such as
tax reform) could boost their 2016
electoral chances. It's a possible
outcome considering the President
would also want to have some kind
of major legislative accomplishment
in his last two years in office.
On the other hand, if Democrats
retain their majority in the Senate
while Republicans retain the House,
a major piece of legislation such
as tax reform will be hard to pass
going into Presidential election
season if the past four years have
been any indication. It's exhausting for us not only as observers of
the political process but as participants. Perhaps a few of us are suffering from "message fatigue" but
we must remain vigilant. No matter
what happens in Congress over the
next several years, the Joint Committee on Taxation will continue to
list inside buildup of cash value on
life insurance as a tax loophole that
needs to be repealed, and we need
to continue to remind Congress that
it is not.
Mark Valentini, MPP is NAILBA's
Director of Government Affairs. You
can contact him at 703.383.3073 or
mvalentini@nailba.org to learn more
about NAILBA's advocacy efforts.
Table of Contents for the Digital Edition of NAILBA Perspectives - May/June 2014
NAILBA Perspectives - May/June 2014
Contents
Chairman’s Corner
CEO Insights
How to Train New Marketing Reps
Reading Ahead
Life Happens
The 3M Formula for BGA Marketing Success
NAILBA Charitable Foundation
Member Profiles
Agency Successor Networking Group
Agency Resources
member Profiles
MDRT Annual Meeting
Legislative Update
Calendar of Events
Index of Advertisers
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