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BPAA Federal Policy Update - April 23

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TAX

  • Bloomberg Government - More IRS Bills in House on Tax Day Redux: On Tuesday, April 17, the House of Representatives passed 10 bills to rework parts of the IRS—tying the vote series to “tax day,” the filing deadline for 2017 returns. The measures were part of a bipartisan 12-bill IRS-retooling package the Ways and Means Committee advanced last week. Nine of the bills passed the House without roll call votes. The Protecting Children from Identity Theft Act (H.R. 5192) was approved 420-1. The action now shifts to the Senate, which hasn’t announced whether it will consider the bills passed by the House or develop its own legislation to rework the agency. “The Senate has also had a long-standing interest in redesigning and refocusing the IRS,” Ways and Means Chairman Kevin Brady (R-Texas) told reporters Monday. “I’m hopeful as they watch a good, strong vote come out of the House that they’ll add their ideas to that package and we can try to move it to the president’s desk this year.” On Wednesday, the House passed the last two bills in the Ways and Means package: the Taxpayer First Act (H.R. 5444), which would make several changes at the IRS, including establishing an independent Office of Appeals and eliminating the IRS Oversight Board; and the 21st Century IRS Act (H.R. 5445), which would boost cybersecurity and update online services at the agency.
  • Bloomberg Tax - Uncertain Future for Tax Cuts: House Speaker Paul Ryan(R-Wis.) wants to make permanent some of the individual tax cuts that are part of the 2017 tax act . But it’s not entirely clear where Senate Republicans are on the issue. John Thune (S.D.), chairman of the Senate Republican Conference, said on Thursday he suspects that if Republicans brought another tax cut bill to the Senate floor, Democrats would make sure “we can’t pass it.” Senate Republicans need 60 votes to pass legislation, meaning they would need at least nine Democrats to vote for it. The individual tax cuts in the tax law would expire at the end of 2025. Meanwhile, Senate Finance Committee Chairman Orrin Hatch (R-Utah) said that he is open to considering 12 bills passed by the House this week that would retool the IRS and its operations. “It has a chance,” Hatch said, when asked about the House-passed package. “I could live with the House legislation. We’ll see what happens.” Asked if there had been discussions with Senate Democrats on the issue, Hatch said “not so far, other than general.”
  • Tax Foundation - Recommendations to Congress on the 2018 Tax Extenders:
  • For more than a decade, a collection of temporary, narrowly targeted tax provisions for individuals and businesses have routinely expired and then been temporarily reauthorized, earning the nickname of “tax extenders.”
  • Twenty-six now expired provisions are under congressional review to determine whether they merit a permanent place in the tax code. The ten-year cost of making all 26 provisions a permanent part of the tax code would be $92.5 billion.
  • These 26 remaining provisions broadly fall into four categories: energy provisions, cost recovery provisions, business provisions, and individual provisions. More than half of the remaining provisions are tax credits that subsidize certain economic activities.
  • Seven of the provisions are no longer necessary because the Tax Cuts and Jobs Act (TCJA) provides similar, or better, cost recovery treatment. Seventeen provisions provide narrow, distortive benefits and should be allowed to expire. Two of the provisions, if they are congressional priorities, would be better implemented with permanent policy.
  • Given that Congress did not make these provisions permanent in the Tax Cuts and Jobs Act and that the TCJA will reduce the tax burden on both businesses and individuals, Congress now has an opportunity to eliminate narrowly targeted tax provisions.

Read the full report here: https://taxfoundation.org/2018-tax-extenders/

MINIMUM WAGE & LABOR

  • Bloomberg Government: The Labor Department is drafting a regulation intended to clarify a new law that bans managers from skimming tips, even as the agency begins enforcing the changes to wage-hour law unexpectedly hurried through the government spending process last month. The DOL’s Wage and Hour Division “expects to proceed with rulemaking in the near future to fully address the impact of” of the tips provision included in the federal spending package, according to an internal memo appearing on the WHD website this morning. The amendment to the Fair Labor Standards Act came from a budgetary compromise to quell a major controversy facing the DOL. Attorneys for workers and businesses instantly noticed ambiguities in the omnibus language. Chief among the uncertainties was that the FLSA doesn’t define “manager” or “supervisor,” the two occupations the budget rider now blocks from retaining employees’ tips. The division’s new memo attempts to address this issue by informing investigators to begin enforcing the statutory changes by applying the existing “duties test” when determining who qualifies as a manager or supervisor. This refers to the rules governing which workers perform managerial duties that exempt them from time-and-a-half overtime pay. In another big enforcement update addressed in the WHD bulletin, the division now recognizes the legality of tip pools between front-of-house workers, such as servers and bartenders, and back-of-house employees who don’t directly earn gratuities, such as cooks and dishwashers. This applies only to scenarios when the business pays workers the full minimum wage of at least $7.25 per hour. In other words, restaurants that currently apply the tip credit, enabling them to pay tipped employees as little as $2.13 per hour, can now lift servers and bartenders’ pay up to the full minimum wage and require them to share gratuities with the back of house.
  • Bloomberg Law - White House to Name John Ring Labor Board Chairman: President Donald Trump will name former management lawyer John Ring chairman of the federal labor board next week, sources familiar with the situation told Bloomberg Law April 12. Ring was confirmed April 11 via a party-line vote to serve on the five-member National Labor Relations Board. He will replace atop the board current Chairman Marvin Kaplan, another member of the NLRB's Republican majority appointed by President Donald Trump. Kaplan served as chairman for some five months. The board during Kaplan's tenure became engulfed in a controversy over its decision to rescind an Obama-era ruling that made it easier to hold multiple entities jointly liable for labor law violations. The board later had to withdraw that decision and restore the Obama board's standard. Some Republicans and management lawyers, and even the board's own general counsel, criticized Kaplan for how he handled the controversy. The ethics snafu is ongoing, and Ring will now probably have a chance to weigh in on the ultimate resolution. Ring is a former partner at Morgan Lewis in Washington, D.C.

Pay raise: Natural Grocers sets minimum wage at $11 an hour” – With 146 stores in 19 states, Natural Grocers (NG) is one of our nation’s original organic grocers. Founded in 1955, NG started three years earlier than Trader Joe’s and a quarter of a century before Whole Foods came about. Sixty-three years is a long time to be in business. Over that time, NG has learned a thing or two about keeping employees happy — which in turn keeps customers happy. How does $11/hour stack up against the competition? Paying $11 an hour puts NG above Kroger in terms of starting pay. The latter recently raised pay to $10 an hour for select starting associates near its headquarters. In addition, Target and Walmart both start employees at $11 an hour now, and Costco Wholesale pays $13 an hour.

 

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