Profile: FEI's Committee on Taxation.

• Author: Ferling, Rhona L.
• Position: Financial Executives Institute - From FEI

In this issue of Financial Executive, we continue our series of profiles of FEI's committees, which track legislative, regulatory and business developments important to financial executives.

If you can imagine being up to your elbows in taxes all year round, then you have a pretty good idea of what it's like to serve on FEI's Committee on Taxation. The committee, headed by Sandy Navin, vice president and director of taxes for General Mills, develops statements and positions on tax legislation, policies, practices and regulations. Plus, it studies issues ranging from the economic and social implications of both domestic and international taxes, tax simplification and administration, to tax and accounting relationships.

That's quite a mouthful, but in a nutshell, COT's mission is to "foster sound tax policy," says Chairman Navin. Good tax policy as a goal, however, has lost ground to deficit and budget issues during the last 10 or 15 years. "As a result, we end up fighting this constant battle between trying to simplify the tax code and raising more revenue," he notes. The committee believes its best shot at effecting changes is to meet with members of Congress and the administration and to keep its sights trained on broad policy issues rather than getting bogged down in administrative or procedural questions. But unlike other FEI committees, COT doesn't use formal subcommittees to accomplish its objectives. Instead, members form small task forces (usually about five individuals) that are flexible enough to permit them to respond to the issue's development as they see fit. "The task forces form their own charter," explains Cyrus Halpern, tax vice president at AT&T and vice chairman of COT. "They determine what they want to do and how to do it. Then they report back to the group and write position papers on behalf of the committee and FEI for the Internal Revenue Service and other government bodies."

One of the committee's major accomplishments in 1993 was successfully lobbying for a lower corporate tax-rate increase after President Clinton announced plans to raise the rate to 36 percent. In a letter to the president, Treasury Secretary Lloyd Bentsen and key members of Congress, the committee objected that such an increase would run counter to the government's goal of promoting economic growth, even if it were offset by investment tax incentives. Although the committee didn't succeed in convincing the administration to hold the line at 34...