Excise Tax Repeal Legislation Reaches 221 Cosponsors in Congress
Legislation introduced by Rep. Kevin Brady (R-TX) that would permanently repeal the so-called "Death Tax" crossed an important threshold now that a majority of the House of Representatives have signed on as cosponsors of the proposal. HR 2429, which enjoys support from both Republicans and Democrats, would eliminate the tax that often prevents family-owned businesses to be passed down to the next generation.
"It's wrong for Uncle Sam to swoop in when you die and take almost half of the nest egg you spent a lifetime building," said Brady. "At a time when we need to spur the economy and employment, abolishing the Death Tax is certainly a step in the right direction."
Senator John Thune (R-SD) has championed companion legislation in the Senate (S 1183) that already has 37 cosponsors. The Family Business Estate Tax Coalition (of which BPAA is a member) will be encouraging legislators to take up the bill before the end of this year's legislative session.
Federal Soda Tax Bill Expected
Rep. Rosa DeLauro (D-CT) has announced plans to introduce the nation's first federal tax on sugar-sweetened beverages. Even though the legislation is expected to fail, supporters acknowledge their goal is about promoting the anti-soda message among a wider population.
DeLauro originally spoke out against sodas and the beverage industry at a Capitol Hill screening of propaganda film "Fed Up," a movie co-produced by Katie Couric and supported by anti-industry activists that has started a national conversation on the food industry's role in the obesity problem. At the National Soda Summit (held in Washington, DC in mid-June), she announced, "I hope to introduce [soda tax] legislation in a matter of weeks, and I look forward to working with all of you to make this a reality."
Supporters of a soda tax include members of the traditional "food police" like Center for Science in the Public Interest, a group that has tried to ban soft drinks of all kinds from the marketplace. CSPI and other organizations have worked to argue that soft drinks and other foods are "addictive" – which will help justify more government intervention to control consumption.
The policy attacks have been most dangerous at the state level. Soda tax proposals have been introduced over the past few years in many states and a handful of localities. Recently, legislation was considered in the state of California that would have required warning labels (like those found on tobacco and alcohol products) on so-called sugary beverages like soda and sports drinks, but it failed to pass. Beverages with 75 or more calories per 12 ounces would have required labels.
Depreciation Tax Break One Step Closer to Final Passage
On June 12, the U.S. House revived the popular corporate tax break known as "bonus depreciation," which expired at the end of last year. The tax break, which the House voted to extend permanently, allows businesses to deduct up to $500,000 in new equipment purchases.
However, the ultimate fate of the provision remains uncertain. In April, the Senate Finance Committee approved a bill sponsored by Majority Leader Harry Reid (D-Nev.) to extend bonus depreciation as well as other lapsed tax breaks only through the end of 2015.
Business owners can still recover capital investment costs through other depreciation deductions, which can be claimed steadily over a period of several years. Bonus depreciation, however, accelerated the deductions so proprietors could retain more capital and grow their businesses.
If you have recently made some capital improvements or invested in equipment, you may be affected by the expiration of the bonus depreciation. For more questions or to get involved, contact Kristen Eastlick at (202) 463-7100 or firstname.lastname@example.org.
Will D.C. Set a .05% BAC?
D.C. City Council member—and Democratic mayoral candidate in the heavily Democratic city—Muriel Bowser has recently proposed lowering the blood alcohol content threshold for drunk driving in the District to 0.05 percent, down from the current legal limit of 0.08. If passed, D.C. would have the lowest BAC for drunk driving in the nation.
Last year, the National Transportation Safety Board released a series of recommendations on how to improve the nation's drunk driving record, including a proposal to lower state BAC limits. At 0.05, many of your customers could be considered criminally impaired after just one drink while bowling.
The on-premise beverage industry has consistently opposed lower drunk-driving arrest thresholds, arguing that they do not increase traffic safety. More than 70 percent of drunk-driving fatalities are caused by drivers with BACs of .15 or higher, almost double the current BAC limit of .08. But anti-alcohol activists continue to expand laws that would target responsible social drinkers who are not a part of the drunk-driving problem.
Since the NTSB recommended a lower BAC level last fall, support popped up in states like Iowa, Utah, and New York. While the D.C. proposal has yet to garner overwhelming support, the state activity suggests that a lower BAC level may come up next year during a debate over the highway spending debate, where new traffic safety laws are often introduced.
Many States and Localities Hike their Starting Wage to $10+, Triggering Unintended Consequences
In 2014 alone, more than a dozen states and localities have enacted higher starting wages. The movement to raise the minimum wage to such high levels has been spurred by coordinated protests organized by labor unions (most notably the Service Employees International Union or SEIU) calling for $15 an hour in at least 150 cities this year. As a part of this campaign, the Obama Administration has called for a $10.10 federal minimum wage – a 40 percent wage hike. Unfortunately, a mandatory wage hike triggers unintended consequences that typically harm the most vulnerable entry-level employees.
The nonpartisan Congressional Budget Office predicts that up to one million jobs may be lost if the President's wage hike is enacted. That's because employers have to figure out how to raise prices, cut employees or employee hours, or reduce service in order to absorb the new costs.
Last fall, New Jersey voters approved a new minimum wage of $8.25, and the state’s employers were recently asked how that higher wage would affect their operations. Nearly 50 percent of those surveyed reported they were likely to reduce staffing levels.
Here are the wage hikes that have been approved so far this year (as of press time) and when the highest rate will be in effect:
||$10.10 by 2017
||$8.75 by 2016
||$8.25 by mid-2015
||$10.50 by 2018
||$10.10 by 2018
||Las Cruces, NM
||$8.50 by 2016
||$10.10 by 2018
||Prince George's County, MD
||$11.50 by 2017
||$11.00 by 2017
||Montgomery County, MD
||$11.50 by 2017
||$9.25 by 2018
||$15.00 by 2017
||$10.00 by mid-2016
||$11.50 by 2017