Duke Energy, startup investors see benefits in tax bill
Posted November 16, 2017 4:28 p.m. EST
Updated November 16, 2017 5:02 p.m. EST
Raleigh, N.C. — Duke Energy says tax legislation passed by the U.S. House Thursday will mean more jobs and increased capital investments. And the trade group representing investors in startups sees benefits in the bill. But numerous Triangle companies won't talk about how the bill would help or hurt.
"Duke supports comprehensive tax reform and we believe it is good for the economy," company spokesperson Sean Patrick Walsh said.
"Transforming the tax code in a smart way will unleash companies like Duke Energy to power economic growth through vital investments and job creation."
Comments from Duke Energy and the National Venture Capital Association differ from a skeptical reaction by a number of CEOs during a Wall Street Journal event on Wednesday. According to CNBC, only a few said the tax bill would drive more job creation and investment.
Creating jobs and capital investment have been lauded by the administration and Republicans as key reasons to support the $1.5 trillion bill.
Other major local employers, including Red Hat and Cree, declined to respond Thursday when asked how the bill would impact their business.
Walsh, who works in Duke Energy's Washington, D.C., office, pointed out that the Charlotte-based company recently announced a 10-year plan to "strengthen" the North Carolina power grid.
He also said Duke was pleased the tax bill would enable utilities to write off interest expense.
"The electric power industry is the nation’s most capital-intensive, investing more than $100 billion annually to build smarter energy infrastructure and to transition to cleaner generation sources," Walsh said. "Due to the highly regulated nature of our business and the ability to keep customer rates low through a prudent use of debt, our industry stands apart in our need to preserve interest deductibility in tax reform."
Venture capitalists like bill
The National Venture Capital Association, which is the industry trade group for investors in startups and emerging entrepreneurial companies, also declared its support for the House bill. North Carolina's startup economy boasts hundreds of new and emerging companies across the state, primarily in the Triangle.
“Throughout the process, we have been championing tax reform recommendations that would encourage new company formation, and we are pleased to see some of those incorporated into the House bill,” said Bobby Franklin, the CEO of NVCA, which is based in Washington, D.C.
The NVCA has argued with the Trump administration over such issues as carried interest, which investors see as essential to making investments that they hope someday become profitable. The NVCA also has lobbied to keep other benefits related to stock, such as options granted to employees.
“Preservation of the Qualified Small Business Stock rules and the R&D credit payroll tax offset are key to ensuring a vibrant entrepreneurial ecosystem, and we appreciate lawmakers providing relief to startup employees that are unfairly hit with a tax bill on phantom income they haven’t yet received," Franklin said in a statement.
"As the process moves forward, we will continue to work with House and Senate lawmakers to ensure that tax reform supports the entrepreneurial ecosystem and doesn’t disrupt or discourage patient, long-term investment into innovative companies.”
Duke Energy embraces interest deductibility
In his response to a series of questions from WRAL, Walsh cited being able to write off interest expense as important to Duke Energy.
"In particular, we are encouraged to see that the House and Senate versions of the tax reform bills include provisions to retain interest deductibility for regulated utilities," Walsh said.
"This is an important step that allows us to continue providing affordable and reliable service and power economic growth to benefit our customers and communities.
"We are working to ensure the final tax package preserves interest deductibility for regulated utilities, as well as their holding companies, which is directly tied to the economic investments we make in our service territory states."