Business leader says Trump changes could boost economy
IPSWICH — The Trump administration could bring some welcome changes to the New England economy by lowering business taxes, boosting spending on roads and bridges, and loosening federal regulations on banks, James Brett, the long-time president and CEO of the The New England Council, told local business people Friday morning.
Trade policy, he said, is still an uncertainty for New England's importers and exporters.
Brett shared his thoughts about Trump and the economy at a North Shore Chamber of Commerce's breakfast forum at the Ipswich Country Club.
The New England Council is a regional business organization that lobbies for economic development issues in Washington, D.C.
Here are highlights of his talk.
Tax reform to spur job growth had been stymied by a deeply divided Congress, Brett said, but that could change under a Trump administration.
"Now we have a president who campaigned on the pledge to fix our broken tax system, perhaps even in his first 100 days in office," Brett said, "and a Republican-controlled House and a Republican-controlled Senate who seemed eager to work with him."
The House Republican plan, he noted, aims to make the tax code simpler, fairer and flatter for individuals by bringing the number of tax brackets down from seven to three, something the Trump tax plan also favors.
The business community has also called for a reduction in the corporate tax rate of 35 percent. The House Republican plan would lower this rate to 20 percent; the Trump plan drop it to 15 percent, while also eliminating the corporate alternative minimum tax, moves that are favored by businesses, Brett said.
Good news for New England, he added, is that Springfield Congressman Richard Neal, a Democrat and the dean of the New England congressional delegation, is the most senior-ranking Democratic member of the tax-writing House Ways and Means Committee.
Trump has vowed to act quickly on a $1 trillion spending plan for roads and bridges, Brett said, something that both sides of the aisle agree is needed to help businesses stay competitive and create construction jobs. Brett said there were 1,800 bridges in New England rated structurally deficient by the federal government in 2015.
"You and I know, all we need is one accident on one of those 1,800 bridges, and you have a fatality, and Congress would say it's time. Public safety demands it, so this is an issue both sides are very interested in addressing."
While few details about Trump's infrastructure plan are known, private financing serves as its cornerstone, Brett said, with $137 billion in federal tax credits to back the program. Brett said this approach has come under harsh criticism, because it is feared private investors would only be interested in doing projects that create a revenue stream to recoup costs, such as those that have tolls or user fees. That might mean some critical infrastructure fixes would be ignored, he said.
Trump has expressed interest in rolling back aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act that was passed after the recession eight years ago.
"Many institutions," Brett said, "particularly the small community banks and credit unions which are so important to our region, have found Dodd-Frank regulations to be incredibly burdensome and frustrating."
Small banks, he said, were not responsible for the financial crisis, and some small banks employ more regulatory compliance officers than they do loan officers.
Uncertainty about international trade and access to foreign markets continues to be a concern among New England businesses, Brett said. It appears the Trans-Pacific Partnership, a trade agreement among 12 nations of the Pacific Rim, is dead, Brett said, "which is very frustrating for many businesses who waited several years for the agreement to be finally completed."