Legislative Updates

Sept. 13, 2021

Provisions Would Allow NLRB to Issue Civil Penalties and Increase OSHA Fines

Summarized from Jade West, National Association of Wholesaler-Distributors

Everyone paying even the most remote attention to Congress these days knows that last week they began the extraordinary process of trying to pass another $3.5 trillion spending bill – in as little time as possible – using a reconciliation process so the Democratic-controlled House and Senate can pass it without any Republican votes.

Numerous House Committees are now “marking up” issue-specific legislation, and once those mark-ups are completed, the individual committee bills will be merged into the huge reconciliation bill that will be considered by the full House. A similar procedure will take place in the Senate (but all we have now is the House language).

It’s hard to know where to even start trying to unpack this massive piece of legislation. Perhaps we should rely on the not very GOP-friendly New York Times for a headline description from its Sept. 7 story:

From Cradle to Grave, Democrats Move to Expand Social Safety Net: The $3.5 trillion social policy bill that lawmakers begin drafting this week would touch virtually every American, at every point in life, from conception to old age.

On Sept. 8, the House Education and Labor Committee rolled out its piece of the reconciliation bill. We are still trying to figure out all the damage it would do, but notable among the provisions are:

  • The section of the so-called PRO Act that would, for the first time, allow the National Labor Relations Board to issue civil penalties in unfair labor practice cases;
  • Extending those NLRB civil penalties to officers and directors, making them personally liable for unfair labor practices;
  • A mandate that all companies with more than five employees provide auto-enroll retirement plans;
  • Increase in OSHA fines and penalties by a factor of 10 (i.e., $70,000 to $700,000); and
  • Increased penalty and fine authority for the Equal Employment Opportunity Commission.

Bloomberg describes the Labor provisions this way: The $761 billion measure, released Wednesday, is loaded with pro-worker and pro-union provisions that could pass without needing a single Republican vote – if they can overcome procedural hurdles.

You can read the Bloomberg story here
 

Sept. 13, 2021

OSHA Developing Rules for Vaccinations or Once-a-Week Testing

Summarized from Jade West, National Association of Wholesaler-Distributors

The Biden Administration announced on Sept. 9 that more than 80 million Americans working in the private sector will be required to receive a COVID-19 vaccine or produce a negative test result at least once a week.

The Occupational Safety and Health Administration (OSHA) is developing the rule that will require vaccinations or once-a-week testing for private sector companies with more than 100 employees. OSHA will issue an Emergency Temporary Standard (ETS) to implement this requirement in the coming weeks.

To read Biden’s plan, click here.
 

Sept. 8, 2021

Unspecified Protections would be an Ineffective Replacement, Coalition Says

FEDA has signed on to a letter supporting the continuation of stepped-up basis for family-owned businesses.

The Family Business Estate Tax Coalition sent the letter to Rep. Richard Neal (D-MA) and Rep. Kevin Brady (R-TX), chairman and ranking member of the House Committee on Ways & Means, urging them to protect stepped-up basis. Under the current step-up rule, an heir who later sells the business only faces capital gains taxes on the difference between the sale price and the business worth at the time of the inheritance. Changing the rule, as the Biden Administration has proposed, would force many family-operated businesses to liquidate assets or reduce their workforce to pay the tax burden upon the current owner’s death.

“A recent EY report forecasts that 40,000 jobs would be lost in each of the first 10 years and GDP would decrease by $50 billion over 10 years if stepped-up basis were repealed via carryover basis,” the letter states. “Carryover basis is not an effective exemption from step-up repeal for family-owned businesses and farms, and the FBETC opposes any such misguided “protections.”

To read the full letter, please click here.
 

Sept. 8, 2021

House Passes Rule Effectively Separating the Spending Proposals

The $1 trillion bipartisan INVEST in America Act inched a little closer to passage after the House of Representatives set a Sept. 27 deadline to vote on the bill.

On Aug. 23, the House adopted a procedure for consideration of the bill that forces an up or down vote on the bill with no amendments if it is no considered before Sept. 27. The rule effectively prevents the package’s passage from being tied to the $3.5 trillion budget reconciliation bill favored by some Democrats that aims to create economic transformation and would likely be paid for through tax increases on corporations and wealthy individuals.

To help explain this process and the status of both proposals, the U.S. Chamber of Commerce published two explains. Please see the following documents:

 
Sept. 8, 2021

Phasing Out the Deduction Would Harm 1 Million Businesses and 28 Million Workers

The S Corporation Association has published an in-depth defense of the 199A deduction in light of a proposal from Sen. Ron Wyden (D-OR) to phase out the deduction that many owners of Main Street businesses rely on.

In the post, the S Corporation Association states, “The cumulative effect of these tax hikes will be to hurt millions of Main Street businesses, their employees, and the communities that depend on them.” If the deduction were phased out, it would impact as many as 1 million businesses and 28.4 million jobs.

The article further explains that S corporations cannot simply convert to C corporations because they would be paying the same rates as public companies despite also paying dividends to taxable shareholders. “The 199A deduction is necessary to establish rate parity between C corporations and pass-through businesses,” the article states. “Without it, pass-through businesses will pay marginal rates almost half-again higher than even the largest C corporation.”

To read the full article and the breakdown of how phasing out the 199A deduction would impact Main Street businesses, please click here.
 

Sept. 8, 2021

Individual and Family Business Owners Would be Harmed by Tax Hikes

FEDA signed on to a letter asking legislators to reject any measure that would raise taxes on Main Street employers as part of the proposed reconciliation bill.

The letter will be sent this week to Rep. Richard Neal (D-MA), chairman of the House Ways and Means Committee. “The package of tax hikes being considered by the Biden Administration and Congress represents a direct assault on these employers,” the letter states. “Proposals to raise individual and corporate rates, increase the capital gains tax and impose a new ‘double death tax’ would raise taxes on Main Street businesses when they operate, when they are sold, and when they are passed on to the next generation.

“This triple threat would lock in unprecedented levels of government spending and taxes that would handicap these businesses, and the communities that rely upon them, for decades to come,” the letter continues. “They would also violate the president’s pledge not to raise taxes on individuals making less than $400,000 a year. Many individual and family business owners that make less than $400,000, including the 1.4 million private C corporation owners, family businesses with ownership shares held in trust and entrepreneurs selling their business after a lifetime of work, will be directly harmed by these tax hikes.”

To read the complete letter, please click here.
 

Aug. 23, 2021

House Could Take Up Infrastructure Bill this Week

The U.S House of Representatives is expected to take up the $1 trillion bipartisan INVEST in American Act as early as this week. The bill would invest $550 billion in infrastructure over five years, including constructing new roads, bridges and rail lines, as well as maintaining existing ones.

The U.S. Chamber of Commerce is asking businesses to contact their legislators and encourage them to support the package. To find your U.S. representative and his or her contact information, visit house.gov/representatives and enter your home zip code in the top right corner. For your U.S. senators, visit senate.gov and click on the “Find Your Senators” by state dropdown menu in the top left corner.

To learn more about the infrastructure bill and to read 10 reasons why the U.S. Chamber supports the bipartisan deal, please click here
 

Aug. 16, 2021

Bipartisan Plan Heads to House

The $1 trillion bipartisan infrastructure bill passed the Senate in a 69-30 vote on Tuesday, Aug. 10. It will now head to the House of Representatives for approval before it can be signed by President Joe Biden.

The INVEST in America Act includes $550 billion in federal investments for infrastructure over five years, including funding to rebuild and construct roads, bridges and major infrastructure. The bipartisan plan has been supported by a wide range of business and trade associations, including the U.S. Chamber of Commerce.

"Our elected leaders are on the precipice of a historic investment in our nation’s crumbling infrastructure,” U.S. Chamber President Suzanne Clark said in a statement last week. “Turning this long-overdue promise into a reality will grow our economy and strengthen our competitiveness for decades to come. We applaud the Senate for doing its job on a bipartisan basis, thoughtfully debating and passing much-needed infrastructure legislation that will finally invest in America’s roads, bridges, and other critical infrastructure, create millions of jobs, and improve the quality of life for every American. Now it is time for the House to continue the bipartisan progress and send this bill to the president’s desk."