Insights - January/February 2018 - 23
'Very Beneficial'
"A reduced tax rate will be very beneficial to carriers with
better margins freeing up a lot of cash," said Mullett. "Most
will have strategies to use the cash that involve growing their
business or increasing driver pay to ensure they have capacity
to keep up with anticipated demand."
For example, Union Pacific in a January Securities and
Exchange Commission filing reported a tax benefit of $5.8
billion, largely related to deferred tax expense from prior years.
Mullett and others highlighted portions of the legislation
regarding recognition of expenses for tax purposes.
"The five-year provision for the full expensing of new and
used equipment is of great benefit, as it will enable carriers to
buy new, safer, more fuel-efficient rolling stock," said Robert
Pitcher, an ATA vice president.
Kahanek said the expensing change will create a positive tax
climate for railroads and other capital intensive industries, and
encourage more investment.
"My worry is not about the supply chain's ability to handle
the growth," Mullett said, citing a broader concern about lack of
infrastructure funding, particularly for freight. "What will happen
if we don't get busy on increasing throughput will be longer
delivery times, more uncertainty,
and larger inventories. Those
things will offset some of the
benefits created by the Tax Cuts
and Jobs Act."
Joung Lee, policy director
at the American Association of
State Highway and Transportation
Officials, also expressed concern
about infrastructure, calling the tax
measure "a missed opportunity."
Lee
He said AASHTO was really
hoping the tax measure would
address the Highway Trust Fund
shortfall and provide a long-term
solution to its funding level.
Private Activity Bonds
Survive
Susan Monteverde, vice
president of government relations
for the American Association of
Port Authorities, said the group
and its members were pleased
that the tax-exempt status of
private activity bonds, which at
one point was
removed from the bill, survived
after all.
Robert Voltmann, president of
the Transportation Intermediaries
Association, identified a different
set of benefits. "We were
encouraged that Congress and
the administration recognized
Monteverde
the importance of small business
America," he told Insights.
"We are encouraged by other
steps, such as asking to explore
the opening opportunities for
health care to associations," he
said. "For too long, Washington
has only dealt with big business.
Yet there is a whole host of small
businesses out there, in logistics
and other fields. We are glad we
Pitcher
are finally being noticed."
Pitcher also noted the different
impact on companies based on how they are organized for
tax purposes. He said the large cut in corporate taxes will be
extremely helpful to traditional corporations.
"The owners of trucking companies that are organized
as pass-through entities (subchapter S corporations or sole
proprietorships, for instance) will also see tax cuts for the
most part, though the details are more complex," Pitcher
added.
The retail community also was pleased with the new tax
scenario, though one official saw no guaranteed link between
lower rates and steps to strengthen the supply chain.
Retailers See
New Options
Brian Dodge, senior executive
vice president at the Retail Industry
Leaders Association, said retailers
certainly will have more money to
invest in four major areas: opening
more stores, investing in the
workforce, upgrading technology
and/or increasing supply chain
Dodge
efficiency.
The RILA official said he wasn't expecting infrastructure
investments to be addressed in the tax bill, since they
consistently are handled in spending measures. He wasn't
sure at this point that infrastructure spending legislation would
be passed by Congress, given that this is an election year.
"Hopefully, it will come together," he said.
He explained that retailers will gain relief from what was
the highest effective tax rate among all industries, as well as
expected growth from added spending by consumers.
"The passage of major tax legislation by Congress will
certainly continue to help the retail industry, as well as its
workers and customers," said Jonathan Gold, vice president,
supply chain and customs policy at the National Retail
Federation.
Mullett added that steps to repatriate overseas profits are
important. However, he was disappointed by the exclusion
of tax credits for use of alternative energy sources such
as natural gas by freight carriers, since that would have
encouraged growth of technology that lowers emissions.
Voltmann
January/February 2018 | Intermodal Insights
23
Table of Contents for the Digital Edition of Insights - January/February 2018
IANA News
Service, Capacity, Innovation Focus Will Help to Sustain Intermodal Progress
Intermodal Moves Toward ‘Digitization’ of Data
Ocean Carriers Focus on Continued Adjustment to Global Freight Network
Freight Report
Voice of the Shipper
Intermodal Industry Participants Stand to Gain from Tax Bill
Early Days of ELD Mandate Seem to Indicate Adjustment Period
Government News
New Members
International Intermodal News
People News
Intermodal Calendar
Insights - January/February 2018 - Cover1
Insights - January/February 2018 - 2
Insights - January/February 2018 - 3
Insights - January/February 2018 - IANA News
Insights - January/February 2018 - 5
Insights - January/February 2018 - 6
Insights - January/February 2018 - 7
Insights - January/February 2018 - Service, Capacity, Innovation Focus Will Help to Sustain Intermodal Progress
Insights - January/February 2018 - 9
Insights - January/February 2018 - 10
Insights - January/February 2018 - 11
Insights - January/February 2018 - 12
Insights - January/February 2018 - Intermodal Moves Toward ‘Digitization’ of Data
Insights - January/February 2018 - 14
Insights - January/February 2018 - 15
Insights - January/February 2018 - Ocean Carriers Focus on Continued Adjustment to Global Freight Network
Insights - January/February 2018 - 17
Insights - January/February 2018 - 18
Insights - January/February 2018 - Freight Report
Insights - January/February 2018 - 20
Insights - January/February 2018 - Voice of the Shipper
Insights - January/February 2018 - Intermodal Industry Participants Stand to Gain from Tax Bill
Insights - January/February 2018 - 23
Insights - January/February 2018 - Early Days of ELD Mandate Seem to Indicate Adjustment Period
Insights - January/February 2018 - 25
Insights - January/February 2018 - 26
Insights - January/February 2018 - Government News
Insights - January/February 2018 - New Members
Insights - January/February 2018 - International Intermodal News
Insights - January/February 2018 - 30
Insights - January/February 2018 - 31
Insights - January/February 2018 - Intermodal Calendar
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