May 24, 2019

Washington Wire: One Voice Comments on Tax Reform Priorities


One Voice Comments on Tax Reform Priorities  

On July 17, One Voice formally filed comments on tax reform with the Senate Finance Committee, which also held a hearing on the prospects and challenges of comprehensive reform. In preparation for the hearing, Finance Committee Chairman Orrin Hatch (R-Utah) requested suggestions and recommendations on areas connected to taxes on individuals, families and tax administration, businesses, savings and investments, and the international tax system. House, Senate, and administration negotiators hope to release a draft tax reform plan in September and begin formal consideration shortly thereafter. Sources indicate they may issue an outline by the end of this week to demonstrate progress and show unity on tax reform to contrast the health care reform process.
The current tax structure is a myriad of high rates, temporary credits, loopholes, and outdated policy, restricting growth and reducing competitiveness. In its comments to the Committee, One Voice specified:
  • Setting globally competitive income tax rates for both pass-through entities and C-Corporations;
  • Allowing for 100% business capital expenditures expensing;
  • Maintaining business loan interest deduction, particularly for small businesses;
  • Using SBA definition for a small manufacturing business for specific provisions/exemptions;
  • Increasing R&D Tax Credit Alternative Simplified Credit to 20%;
  • Allowing for continuation or reasonable transition for Last-In-First-Out, Net Operating Loss and IC-DISC.



Administration Announces NAFTA Priorities
U.S. Trade Representative Robert Lighthizer said Wednesday that talks with Mexico and Canada on overhauling NAFTA are slated for August 16 – 20 in the nation’s capital. This will kick off seven rounds of negotiations at three-week intervals, with Mexico hosting the next round. All three parties hope to conclude final talks by January 2018 ahead of Mexico’s July presidential election and the U.S. mid-terms in November.
One Voice, in June, submitted its NAFTA priorities to the administration asking they address a number of violations, existing red tape, and ways to stabilize and strengthen the 23-year old agreement. As required by law, the White House on July 17 released a somewhat detailed list of objectives for the negotiations, including:
  • Eliminating the Chapter 19 dispute settlement panel and the global safeguard exclusion forcing Canada and Mexico to use the U.S. trade court system (requires Congressional approval);
  • Updating and strengthening the Rules of Origin, possibly increasing the content requirements of a good closer to 75% or higher, allowing cross NAFTA borders duty-free;
  • Discussing currency manipulation and extending those provisions to other countries trading with NAFTA members;
  • Promoting greater regulatory compatibility with respect to key goods sectors;
  • Expediting release of shipments, automating and simplifying the import, export, and transit processes, and harmonization data requirements;
  • No longer requiring cross-border services suppliers first establish a local presence;
  • Placing environmental and labor standards within NAFTA, instead of using side agreements;
  • Establishing an SME Committee thereby ensuring the needs of SMEs are considered as the Agreement is implemented so they will benefit from new commercial opportunities.



2017 Regulatory Agenda Released; Overtime Pay Limit Rewrite Begins
On July 20, the Trump administration released its first semi-annual preview of its regulatory priorities for the remainder of 2017. Issued by every administration and formally known as the Unified Agenda, the White House noted in its release that through the first five months of the year, agencies withdrew 469 actions proposed in the Fall 2016 Agenda; reconsidered 391 active actions by reclassifying them as long-term (282) and inactive (109), and allowing for further review.
A number of top One Voice priorities appear in the Unified Agenda including plans to rewrite the Electronic Recordkeeping rule that sought to post data from Form 300A online; issue a new definition for Waters of the U.S.; replacing the Ground Level Ozone rule by March 2018; and critically important to many One Voice members, a delayed review to April 2018 of Lockout/Tagout policies.
In addition, on July 25, the Department of Labor announced posted a request for information in reviewing the previous administration’s attempt to more than double the overtime exemption threshold from $23,660 to $47,476 per year for Executive, Administrative, Professional & Clerical Employees (EAP) and for highly compensated workers from $100,000 to $134,000. One Voice is part of a business coalition lawsuit filed and pending in the courts following an injunction last year to block implementation of the new levels until further review. The administration is seeking comment not only on changes to the 2016 rule, but also more broadly to the underlying law itself, including if different size companies should have varying exemption levels, whether the government should factor in regional pay differences, implementing separate duties tests, among others. One Voice intends to respond to the Labor Department’s request.



U.S. House Moving FY18 Labor, Education Departments Funding Bill
The U.S. House is preparing to move its FY18 appropriations measure to provide funding for the Departments of Labor and Education, and various agencies. The bill recommends level funding for the Perkins Basic State Grant at $1.118 billion, while reducing the Department of Labor’ funding for employment and training services by $1.5 billion below the present level. In addition, the three state formula grants under Title I of the Workforce Innovation and Opportunity Act would decrease by $85.7 million overall, and the bill would also reduce funding for apprenticeship grants by $95 million. While the cuts are significant, they remain below those proposed throughout the President’s Budget Request. These reductions are not out of the ordinary and are often set as a negotiating tactic with the Senate, which traditionally either restores full funding or makes far less drastic cuts. The House and Senate will likely not complete final negotiations on major spending bills for several months, allowing One Voice and other groups concerned with career and technical training and apprenticeship programs time to continue lobbying efforts.