ATLANTA — Legislative decisions made over the next 18 months will have a substantial effect on American businesses, according to Sen. Johnny Isakson (R-Ga.). The remarks were made at the fourth annual InterFace Seniors Housing Southeast conference on Wednesday, Aug. 23. The event drew over 400 industry professionals.
“If you’re in business in America, what happens in Washington has a lot to do with your business,” he says. “You’re going to begin to see pressure on elected officials to move out of partisan voting and I think that’s good for the economy.”
Before entering politics, Isakson worked in real estate for more than 40 years and has a long family history in the industry. His father helped establish the prominent Atlanta-area real estate firm Northside Realty, which Isakson led as president for 22 years. Johnny’s brother, Andy Isakson, founded Isakson Living, a seniors housing development company, based on the Isakson family’s own difficulty finding suitable retirement options for their parents.
Currently serving his third term, the U.S. Senator delivered this year’s keynote address at the Westin Buckhead in Atlanta. According to Isakson, healthcare and tax reform top the list of issues that need be addressed by Congress over the next year and a half.
“Healthcare is 19 percent of the economy,” he said. “You can’t just repeal healthcare without replacing it.”
This issue is especially important for the seniors housing business, an industry that is so closely intertwined with healthcare.
“Our country’s economy is tied to healthcare and we have to get it fixed because right now it is in a death spiral,” says Isakson. “We have to put in practical experience — practical things that worked in the past — to make it work and make it more viable than it is today.”
Isakson noted another issue that will affect businesses is the way the U.S. tax system operates. Currently, the U.S. has a worldwide tax system, meaning a corporation headquartered in the U.S. must pay the corporate income tax (35 percent) on all its income, regardless of whether it is earned in the U.S. or overseas, leaving an American business with less after-tax income than its foreign competitors.
“We need to switch from the way we are today to a territorial tax system,” says Isakson. “Most countries have it and the United States does not.”
Under a territorial tax system, the U.S. would only tax the U.S. income of a corporation, exempting most or all foreign income and matching the system of countries such as the United Kingdom, Australia, Canada, France, Germany and Spain.
“If Congress doesn’t act, you’re going to see major corporations moving their headquarters from the United States to other countries,” says Isakson. “The territorial tax is the way to expand our country, improve the vitality of our country and be competitive on a tax basis with the rest of the world. That will make a difference for the U.S. and each one of our businesses.”
While these decisions could mean big changes for American corporations, Isakson emphasizes that the seniors housing industry is and will remain strong.
“It’s the business to be in right now,” he says. “I’m two years ahead of the Baby Boomers so I’m leading the way. I bought my seniors housing unit and there are a lot more of us coming.”
— Camren Skelton