October 2, 2017 - Weekly Legislative Update
Trump/GOP Unified Framework For Tax Reform Released- WOTC Implications
The President and congressional Republicans delivered their framework for tax reform-click here for the complete document.
Of interest to WOTC advocates is a couple sentences in the section, "Work, Education, and Retirement", which read:
"The framework retains tax benefits that encourage work, higher education and retirement security. The committees are encouraged to simplify these benefits to improve their efficiency and effectiveness."
We'll use this opening to work for several low-cost improvements we've long sought for veterans, people with disabilities, foster youth, and jobs in private non-profit sectors like health and education.
With regard to process and bi-partisanship, the page titled, "Goals" says the following:
"This unified framework serves as a template for the tax writing committees that will develop legislation through a transparent and inclusive committee process. . . . The Chairmen welcome and encourage bipartisan support and participation in the process."
Do "inclusive" and "welcome" mean partnership? Allowing Dems a voice runs against the grain of how Ways and Means has operated the past eight years. It's important how the bill-writing is organized: WOTC is bi-partisan, we're stronger when Democrats have a voice.
There isn't enough in the framework to satisfy Freedom Caucus, but since the goal is to have a bill written by end of October, Speaker Ryan has another month or more to get them on board.
GOP Plan Repeals Death Tax
TIA is happy to report that the joint tax reform framework released last week by the White House, House, and Senate includes full repeal of the estate tax.
The framework states:
"The framework repeals the death tax and the generation-skipping transfer tax."
The Family Business coalition letter with TIA and 152 other organizations supporting full repeal of the death tax undoubtedly helped to remind our friends in Congress of the support among the business and conservative communities for repeal.
Tax reform now looks to be taking a duel track in the tax writing committees of the House and Senate.
On the House side, the Death Tax Repeal Act is the policy that has been vetted and passed with a 240-179 vote.
-Repeals the estate and generation-skipping transfer tax
-Cuts the gift tax to 35%
-Maintains full step up in basis
On the Senate side, repeal has the support of Republicans and Senator Joe Manchin (D-WV) - four other Senate Democrats have voted for full repeal at least once in the past. The last vote was in March 2015 when an amendment passed 54-46. Senator Ted Cruz has made repeal a "must do" in his tax reform principles. Senator Thune's Death Tax Repeal Act currently has 36 cosponsors in the Senate.
Disaster Tax Relief Bill Passes Senate With Amendment, Returned To House
Last week, the Senate passed H.R. 3829 with a Cassidy amendment striking that part of the bill pertaining to establishing a private flood insurance program.
Plain to see, amendments were made after all, only ours wasn't one of them! Seems the Administration may have advised Congress that FAA could wait a few days for its funds.
The bill was returned to the House for action this week. The most likely result will be passage with the Senate amendment; it's unlikely other amendments will be allowed.
Final passage will close our efforts with a modest "win" allowing a WOTC retention credit for firms in all three disaster areas.
In addition the credit isn't limited to firms with 200 or fewer employees, as recommended by AICPA-another plus for our side.
We'll let you know when the bill passes and is signed by the President, then you can go into action implementing it on the basis of the statutory language-don't wait for the IRS and DOL instructions, which can take three weeks.
We'll continue to look for an opening in the coming Puerto Rico bill, but caution that it may contain no tax title.
TIA thanks everyone who heeded our call and worked hard for a more robust WOTC for firms and workers impacted by these disasters!
Sadly, the result will be slower recovery than might have been possible with the extra working capital for firms who are still recovering and looking for workers to replace those unable to return.