Corporate Tax Reform
The Issue: Corporate tax policies must continue to support business travel. Business travel drives jobs growth and economic recovery. Barriers to business travel, including unwise tax policies, will decrease travel, business opportunities, company profits, and revenues for travel buyers and sellers throughout the economy. The multiplier effect is huge as travel spending decreases ripple throughout the economy.
Facing intense pressure to reduce the federal debt and budget deficits, the Administration and Congress will make difficult decisions about key government policies. The Fiscal Cliff with mandatory across-the-board cuts of $109 billion from defense and domestic programs, expiration of the Bush/Obama tax cuts, and expiration of payroll tax holiday and various tax policies is looming. The full spending cuts and tax increases would hit the U.S. economy very hard, including the business travel industry. GBTA Foundation research found that if the economy falls off the Fiscal Cliff, the U.S. would enter a recession, leading to a loss of $20 billion in spending in U.S. business travel over the next nine quarters – a 2.5 percent decline – and 32 million fewer business trips.
However these decisions and the upcoming Fiscal Cliff are resolved, meaningful tax reform is expected to be front and center in 2013. By all accounts, everything will be on the table. Small and large businesses may be impacted very differently, depending on the treatment of deductions, income, corporate structure, operations and other factors. As the debate unfolds, business travelers and businesses must learn about the tax issues impacting their companies and customers. All members of the business travel industry - buyers and suppliers - should let their elected officials know that their votes on these issues matter to the industry.
GBTA Position: Corporate tax policy should facilitate business travel. GBTA opposes any effort to eliminate or reduce reasonable policies that facilitate travel and permit businesses to operate most effectively in the marketplace.
Read Michael McCormick's open letter on the Fiscal Cliff