While the Tax Cuts and Jobs Act (TCJA) has helped bolster the current cycle of economic growth, it’s clear that its passing also coincided with, and in some ways contributed to, a new era of policy uncertainty—in part because important provisions of the TCJA will sunset or otherwise change by the end of 2025. Factor in the upcoming 2020 presidential election, the OECD digitalization project, trade tensions, and global shifts in power, and it’s likely that the tax and overall business landscape might look very different in just a few years. The need for companies to be prepared and engaged is more critical than ever before.
To a significant extent, the current state of uncertainty is being driven by legitimate debates about important public policy goals—the need to increase global competitiveness and create more good-paying jobs and more broadly-shared prosperity. While these goals are widely shared among policymakers, debates rage over which initiatives are most likely to help achieve them.
As conversations continue and as we await critical guidance, many CEOs feel unclear about how they should proceed. That’s understandable, but there are things you can —and should—do now that will help keep your business on a path to growth. A signed bill does not mean conversations should stop. A proposal on the table by a candidate running for office isn’t final legislation. Business can play a critical role in helping policymakers understand the impact that laws can have on their employees’ livelihood and business’s vitality—both before and after the ink on a bill dries.
It starts with messaging.
Each of these unknowns emphasizes the need for tax professionals and their executive counterparts to team up in ways they may never have before to create proactive, strategic solutions that solve complex business problems. For example, how are your company’s leaders reconfiguring global supply chains as a result of trade uncertainty, and how will this affect the company’s tax profile? How will your company’s pricing policies be affected if digital services taxes continue to proliferate in Europe and elsewhere? Answers to these questions and others will create understanding around the laws and contribute to your business’s growth or stagnation. Equally importantly, increasing your understanding of these issues will be critical to developing the messaging you need to take to elected officials and other policymakers whose decisions will affect your business’s ability to compete and win in the marketplace.
Make sure your audience is the right one.
At one stage in my career, I inadequately prepared my boss for a meeting with a policymaker. Unsurprisingly, this had the effect of undermining his confidence in me. It also increased his reluctance to engage in future meetings.
Still, that experience provided me with a valuable lesson: when it comes to delivering your messages, your opportunities are limited. Make sure you’re spending your time in the right places, with the right people, and are prepared to get your point across in an impactful way. Policymakers and their staffs are being inundated at all times. If you want to have an impact that lingers after you leave their office, you have to make the meeting count.
This doesn’t mean only having meetings with policymakers who are already on your side. If they’re already with you, a meeting can be helpful to thank them for their support. If they’re adamantly opposed to your policy goals, you may give them reason to soften their rhetoric, but it’s unlikely you’ll turn an avowed opponent into an advocate. In many cases, I have found policymakers to be in “listening” or “learning” mode far more often than I might have expected. The key is to find those policymakers who are willing to listen and are in a position to make a difference to the outcome your business needs.
Remember that stories sell.
Bottom line, stories are important—whether you are advancing a positive narrative about how a policy change helpfully impacted a community or trying to limit the impact of a negative story that has hurt your company’s image.
Of course, it may be an uncomfortable conversation if you are sitting across from a member who supports a measure that would cause employees at your company to lose their jobs. But even in this setting you must strive to find that human connection to bridge the gap from initial awkwardness to constructive engagement. Use stories that will enable government leaders to pause and think about the challenges you will face and the decisions you will need to make. Try also to understand their perspective. If the issue is significant, you are probably not the only person advocating for one side or the other. How can your story help them explain a difficult issue to other constituents?
But don’t react to every headline.
Not every proposal has legs. Not every perceived risk is real. Not every promise can happen or is even intended to be kept. The best way to help your business prepare for any policy or campaign promise or proposal at the national, state or local level is to do your research, understand the players and work with individuals who understand the dynamics at play and the likelihood that something can or will happen. Filtering through the tide of information will be critical in helping your business stay on track and on message.
No matter what, stay engaged.
Whether 2020 brings a change in presidents or the repeal of a critical law of importance to your business, we are certain to continue to live in an age of uncertainty. Tax policy, trade negotiations and regulatory changes are inevitable as we look forward. View the uncertainty of change as a strategic tool, craft the messaging that will best support your needs, and use this time to carry that messaging to market.
Election day isn’t the only day your voice will count.