The Voice of the Middle Market: ACG Tackles the Tough Issues on Capitol Hill

By Mark Hollis – Partner, Centerfield Capital Partners ACG Indiana, Past President and ACG Global Board Member

According to Pericles, “Just because you do not take an interest in politics, doesn’t mean politics won’t take an interest in you.” This is a precarious time in Washington, and with the change in leadership comes an opportunity to make the business community’s voice heard.  That is why ACG, a global organization of nearly 14,500 members with 45 chapters in the U.S., is working on behalf of its members to make sure that the issues we face at the local level are known in Congress.

The ACG Indiana chapter serves the local needs of its members with strong programing and networking events, but as a member of ACG’s Global Board of Directors I have seen firsthand the powerful impact you can have when we bring our stories and perspective on the middle-market to Congress. Not many people know that middle market companies (those with $10 million - $1 billion in annual revenue) account for one-third of private sector GDP and employ over 48 million people.  Despite these facts, middle-market businesses haven’t historically had a unified voice in Washington. In response, ACG has developed a public policy agenda that acts as a guidepost when talking to policymakers that outlines the issues most effecting local economies and middle-market businesses. These priorities are tax reform, job creation and private capital formation.

Most of the issues ACG speaks to policy makers about are fairly straight forward.  For example, ACG advocates for a simpler and fairer tax environment for mid-sized businesses and investors. One current area of focus is the preservation of interest expense deductibility related to corporate borrowings. A long ingrained stalwart of corporate tax code, interest deductibility has come under fire to the surprise of many. An alternative proposed would allow businesses to expense and deduct 100% of any capital investments, such as equipment purchases, in the year made rather than depreciate and expense them over time. While attractive to companies that routinely make capital investments, many companies use debt to fund needs that are not tied to “capex”, such as working capital, and the loss of interest deductibility would make borrowing more expensive.

Access to capital is often critical for middle-market companies. Given the size of these businesses, private capital sources such as venture capital, private equity and mezzanine debt often come in to play when traditional capital sources, such as banks, aren’t able to meet their needs. ACG is working to help relieve compliance and regulatory burdens placed on private capital providers, while maintaining important investor protections. Many of these lenders and investors manage small pools of capital and pose minimal systemic risks, however, certain aspects of legislation such as Dodd Frank have created unnecessary burdens and compliance costs for them. Relieving regulatory burdens will allow these firms to devote more resources to  helping  companies  survive, thrive  and grow.  Research  from
growtheconomy.org shows that private capital backed companies grow sales and employment at higher rates than their peers, including in the State of Indiana.

Power comes in numbers and your voice is crucial to our success. Many of us in Indiana work for, or provide services to, middle-market companies. Please consider reaching out to your representatives and ask them to support ACG’s middle market initiatives.  To learn more visit www.acg.org/global.com.