Today, the Senate Finance Committee held a hearing titled “Debt versus Equity: Corporate Integration Considerations.” In his opening statement, Senate Finance Committee Chairman Orrin Hatch (R-UT) noted that the tax code subsidizes debt financing for corporations, causing “significant distortions in the economy.” He said that this causes businesses to base financing decisions on tax consequences rather than market conditions, puts consumers at risk for higher interest rates due to overleveraged businesses that are more vulnerable in economic downturns, and favors the use of “complicated tax-planning strategies that redirect resources away from projects and ventures that lead to growth.” Ranking Member Ron Wyden (D-OR) agreed, stating that “business decisions should be made for business reasons, not tax reasons.”

Several witnesses also made statements, which can be found below:

  • Mr. John Buckley

Former Chief Tax Counsel, Committee on Ways and Means United States House of Representatives

Testimony

  • Ms. Jody K. Lurie

CFA Vice President, Corporate Credit Analyst, Fixed Income Strategy and Research, Janney Montgomery Scott LLC

Testimony

  • Mr. John McDonald

Partner, Baker & McKenzie LLP, 

Testimony

  • Mr. Alvin C. Warren, Jr.

Ropes & Gray Professor of Law, Harvard Law School

Testimony