Small Business Update: Tax Reform and More | NFIB
NFIB President Juanita Duggan shares a recap of the recent tax reform victory and a preview of what’s to come in 2018.
NFIB is the nation’s most powerful small business advocate and has won key victories thanks to the support from you and hundreds of thousands of other small business owners. Below is a list of victories from our Legal Center, Political, and Government Relations teams.
Legal Center Victories:
- Legal Center listed as one of the top-ten most influential groups to file briefs in the U.S. Supreme Court by the SCOTUS blog.
- Responsible for obtaining a federal court decision that blocked a Department of Labor FLSA/overtime rule that would have impacted 44% of small businesses.
- Scored big wins in two major 2016 Supreme Court cases–striking down an unfair Clean Water Act ruling and upholding attorney’s fees awarded to a wrongfully accused employer.
- Filed over 50 amicus briefs in 2016, including 25 in the U.S. Supreme Court.
- Sued and stopped the U.S. Department of Labor from implementing the pro-union “persuader” reporting rule that would have limited small business access to labor attorneys.
- Obtained a U.S. Supreme Court emergency order to block the Environmental Protection Agency’s Clean Power Plan. President Trump has vowed to overturn this rule.
- Successfully blocked EPA’s Waters of the U.S. Rule that radically expands the jurisdictional reach of the Environmental Protection Agency and Army Corps of Engineers. Under this Rule, ordinary landowners will be prohibited from developing any portion of land that is even occasionally wet without an exorbitantly expensive federal permit. President Trump has vowed to permanently overturn this rule.
- In a 7-1 victory, the Supreme Court agreed with NFIB’s brief and adopted a more sensible, reasonable limit on the Equal Employment Opportunity Commission’s investigatory powers.
- Successfully rescinded the “Union Walk Around Rule.” NFIB argued that OSHA violated the law in announcing the “Union Walk Around Rule,” which was created outside the normal rulemaking process and allowed union representatives to accompany OSHA inspectors when inspecting non-unionized companies.
- EPA initiated a formal proposal to rescind the Clean Power Plan. In 2015, NFIB joined with other industry groups, and 24 states, and sued in federal court to stop EPA’s enforcement of the rule. In response to the lawsuit, the U.S. Supreme Court, in an unprecedented decision, issued an injunction preventing EPA from enforcing the rule until lower courts could decide the merits of NFIB’s claim.
NFIB’s Political Team Victories:
- NFIB Federal PAC endorsed 289 congressional candidates and had a 91% winning percentage in 2016.
- 25 NFIB members were re-elected and 4 new members were newly elected to Congress. There will be 29 NFIB members serving in the 115th Congress.
Government Relations Victories:
- Judge Neil Gorsuch confirmed to be an Associate Justice of the Supreme Court of the United States.
- EO 13771: Requires agencies to repeal two existing regulations for each new regulation it would like to issue. Also, the total net costs of all new regulation issued between now and September 30 must be less than or equal to zero. The White House reported that they eliminated 22 regulations for every one new regulation proposed.
– NFIB submitted a list of regulations of particular concern to small businesses to the Office of Information and Regulatory Affairs in response to the EO.
- EO 13777: Requires agencies to conduct a 90-day review to identify regulations that should be used to meet the requirements of EO 13771.
- Presidential Memorandum: Permits the construction of the Keystone XL Pipeline.
Congressional Review Act (CRA)
Congress has a legislative vehicle under the CRA they can use to overturn regulations from the end of the prior Presidency. The 115th Congress has used CRAs to get rid of some of the worst regulations from the end of the Obama administration.
- Federal contracting: Repealed a rule that would have blacklisted businesses with possible safety violations from federal contracts, even if the allegations were still pending.
- OSHA: Repealed a rule that would have required employers to keep track of injuries for five years in the past, even though statute limits this obligation to six months.
- Locally-run retirement plans: Repealed a DOL rule that would have allowed cities and local governments to require employers to enroll automatically employees in plans run by these governments.
- Individual Tax Rates: Reduces individual rates for many taxpayers and suspends many deductions. Uses the following rates: 37%, 35%, 32%, 24%, 22%, 12%, 10%, and 0%.
- Standard Deduction: Roughly doubled to $12,000 individual/$24,000 joint, indexed.
- Passthrough Business Taxation (sole proprietorships, S corps., partnerships): (a) creates a 20% deduction for all businesses with incomes up to $157,500 individual/$315,000 joint, indexed (b) creates a 20% deduction for businesses with incomes above $157,500 individual/$315,000 joint, indexed, not exceeding limitation of 50% of wage income.
- Corporate Taxation: Reduces and flattens corporate tax rate to 21% and repeals corporate Alternative Minimum Tax.
- Alternative Minimum Tax for Individuals: Increases individual AMT thresholds to apply only above $500,000 individual/$1 million joint, indexed.
- Estate Tax Relief: Excludes roughly $11 million individual/$22 million joint, indexed.
- Section 179 Expensing: Raises Section 179 thresholds from $500,000 to $1 million per year, indexed.
- Individual Mandate (Obamacare): Penalty for noncompliance repealed effective January 1, 2019.
- Cash Accounting: Extends cash method of accounting to many businesses that are below $25 million in annual gross receipts on average for the past three years.
- Department of Treasury withdrew the estate tax valuation proposal which would have lowered or eliminated the estate and gift tax discounts that have been allowed in the past on the transfer of family-owned businesses.
Put the Brakes on Burdensome Regulations
- The NLRB overturned the decision to expand the definition of joint-employer standard, therefore employers will not be liable for another employer’s employees and employment decisions.
- The Department of Agriculture withdrew a rule that exposed poultry, packer, and swine contractor businesses to lawsuits, regardless of whether their business practices had caused any actual or likely harm to competition.
- Secured permanent relief of a troubling provision in DOT’s Hours of Service rule that would have required two consecutive periods of between 1:00-5:00 a.m. to use the 34-hour restart. Also, stopped a proposal to increase insurance costs on buses and trucks.
- The NLRB abandoned an effort to make all private employers post a sign encouraging unionization.
- The Department of Treasury withdrew the estate tax valuation proposal which would have lowered or eliminated the estate and gift tax discounts that have been allowed in the past on the transfer of family-owned businesses.
Reduced IRS Reporting Requirements
- Repealed the expanded 1099 reporting requirements from the healthcare law.
- Stopped the IRS from forcing businesses to reconcile their gross receipts with the new Form 1099K.
Repealed Harmful Provisions in Obamacare
- NFIB led an effort through Congress to introduce, pass, and sign into law a bipartisan healthcare relief bill. This law reverses the IRS regulation that prohibits employers from directly paying for or reimbursing their employees’ individual market health insurance plans and the accompanying $100/employee/day penalties for small businesses. The Administration will look to expand HRAs further in regulation.
- NFIB prevented premium increases and administrative burdens by suspending the health insurance tax for 2019 and delaying the Cadillac Tax until 2022 and the medical device tax until 2020
- NFIB repealed small business deductible limitations included in the healthcare law.
- Prevented mandatory federal expansion of small business insurance definition, avoiding further unnecessary premium increases for small and midsize businesses.
America’s small business owners are busy running their businesses. As the nation’s leading small business advocacy organization, NFIB is busy working hard in the effort to overcome the challenges you and hundreds of thousands of small business owners face on tax reform, ever-expanding government regulation, and healthcare. Below is a list of challenges from our Legal Center and Federal Public Policy teams.
Small Business Relief from Federal Healthcare Law
- NFIB was the only business organization to challenge the new healthcare law before the U.S. Supreme Court.
- The health insurance tax (HIT)increases average family premiums by $500 per year and cost up to 250,000 jobs.
- While Congress overturned specific regulations utilizing the Congressional Review Act (CRA), Congress has not reformed the regulatory process to consider the impact of proposed regulations on small businesses more fully.
- Although the courts have stayed the expanded overtime rule, NFIB will continue to monitor any potential regulatory expansions especially regulations that might raise the overtime eligibility threshold.
Lawsuit Abuse Relief
- NFIB will continue to support the Lawsuit Abuse Reduction Act, ADA lawsuit abuse reform, and ADA website lawsuit abuse reform.
Protect and Improve Tax Cuts
- The tax cuts for small businesses expire in 2025. NFIB will push for permanent tax cuts for small business owners.
- NFIB will monitor implementation of the Tax Cuts and Jobs Act and advocate for technical changes if small business problems arise.
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