Convenience Store News

FEB 2017

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38 Convenience Store News | FEBRUARY 2017 | WWW.CSNEWS.COM EXPERT'S VIEW and gas (C&G) industry over the past several years. Listed below is a brief summary of some of the major policy proposals the unified Republican government hopes to pass in the first year of the new president's term and how these stimulative initiatives may impact the over- all U.S. economy and the C&G industry in particular. REFORM OF THE U.S. TAX CODE The overall goal of the tax plan outlined in "A Better Way" is to greatly simplify the U.S. tax code and vastly reduce federal tax rates for individuals and corpora- tions. President Trump also campaigned on a platform to lower the federal tax rate for corporations to 15 per- cent, including pass-through entities. These dual goals of lower rates for individuals and corporations were widely discussed and covered during the recent presi- dential campaign. The business community has also been stressing for some time that the federal tax code needed to be reformed, as the country's outdated tax system was actually stifling economic growth. However, what has not received as much attention are many of the proposed details in the Republican House of Representatives plan that will impact merger and acquisition (M&A) activity in the U.S. For example, the House plan would eliminate the current deduction for debt payments for all businesses. Leverage has long played a major role in most acquisitions in the U.S., in part because interest payments are currently tax deductible. "A Better Way" would also eliminate depreciation and P resident Donald Trump is getting ready to enact sweeping changes to the federal tax laws in the United States and the regulatory code that were implemented during the past eight years under President Barack Obama. The new president's tax and regulatory plans closely mirror the blue- print for reforming most of the federal tax code, and revising or eliminat- ing numerous federal regulations proposed by Republicans in the House of Representatives dur- ing the 2016 election cycle. The House blueprint for the economic revival of the U.S. economy is referred to as "A Better Way." It is widely believed that House Speaker Paul Ryan will lead the new administration's legislative initiatives in Congress, and any final leg- islation will include most of the key tax and regulatory concepts included in "A Better Way." While the business com- munity is almost universally cheering on these anticipated policy proposals, it is too early to fully understand how President Trump's plans will actually impact each sector of the U. S. economy and, more specif- ically, the rapid consolida- tion that has been occur- ring in the convenience The Potential Trump Effect How some of the major policy proposals could impact c-store industry M&A By John C. Flippen Jr. & John Sartory, Petroleum Capital and Real Estate LLC

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