economic development

The latest news and legislative activity affecting economic development

July 25, 2019
Legislative Updates

SNAP:

The Department of Agriculture is considering eliminating the Supplemental Nutrition Assistance Program (SNAP) benefits for 3.1 million people. Ohio Democrats Marcia Fudge, Tim Ryan and Sherrod Brown were vocally opposing this proposed change this week. They and many Democrats argue this rule change would kick seniors, children, working families and the disabled off SNAP and ignores the stated will of Congress because similar proposals were rejected in congressional debates over the 2014 and 2018 farm bills.

FAA Leadership:

The Senate confirmed Steve Dickson, a former Delta Air Lines executive, to lead the Federal Aviation Administration (FAA) on a 52-40 vote. A Senate committee earlier advanced Dickson’s nomination on party-line vote after Democrats cited concerns on the nominee’s failure to disclose involvement in a whistleblower lawsuit. The Senate will need to take up a legislative waiver later this week to allow both Dickson and acting administrator Dan Elwell to lead the agency together.

July 11, 2019
Legislative Updates

Democrats’ Tax Credit and Extender Package
House Democrats are advancing their first substantial tax package since taking control of the House. At a June 20 markup, the Ways and Means Committee approved bills to aid lower-income workers, repeal an unpopular provision in the 2017 tax overhaul, renew expired tax breaks, and provide relief to disaster victims. 


The measures omit a corporate income tax rate increase Democrats have considered. The 2017 tax law (Public Law 115-97) set the rate at 21%. The package’s price tag tops $100 billion, but Ways and Means Chairman Richard Neal (D-MA) said he’s committed to finding more offsets. 

Worker and Family Benefits
H.R. 3300 from Chairman Neal would expand the earned income, child, and child and dependent care tax credits, and direct payments for them to U.S. territories. 
The measure would make several changes to the earned income tax credit. It would:
• Lower the minimum age to claim the credit for childless individuals to 19, instead of 25, and raise the limit to age 66, instead of 65. The maximum childless credit would be $1,464, instead of $529, according to a summary from House Ways and Means Committee Democrats. Changes would be in effect for 2019 and 2020. 
• Allow individuals with children who don’t have the identification required by the credit, such as a valid Social Security number, to claim the childless credit.
• Treat individuals who are married but separated as unmarried when claiming the credit. Individuals couldn’t file joint returns and would have to meet other requirements. 
• Modify the treatment of investment income when determining credit eligibility. 
• Make payments to U.S. territories for a portion of the cost of their earned income tax credits. 

The measure would make the full amount of the child tax credit —as much as $2,000 per child — refundable for 2019 and 2020. Currently as much as $1,400, indexed for inflation, is refundable, meaning it can be claimed on a return even if it exceeds tax liability. Refundability wouldn’t be based on the current formula that incorporates individuals’ earned income or Social Security tax payments. The credit income limit of $200,000 for individuals or $400,000 for joint filers would remain.

Retirement Savings Overhaul
Individuals would have more flexibility to save for retirement and unrelated businesses could offer joint retirement plans under H.R. 1994, the Setting Every Community Up for Retirement Enhancement Act. The measure, introduced by Chairman Richard Neal (D-MA) would allow individuals to temporarily withdraw money from their retirement accounts following a birth or adoption, and would modify contribution limits and mandatory minimum distribution requirements for older Americans. It would also allow 529 education savings accounts to be used for apprenticeship fees and student loans. Most provisions would apply to plan years beginning after Dec. 31, 2019. The rule for floor debate would automatically modify the bill with a manager’s amendment from House Ways and Means Chairman Richard Neal (D-MA).


Relative to the committee-approved bill, Neal’s amendment:
• Adds provisions to address an unintended effect of the 2017 tax overhaul (Public Law 115-97) that resulted in a tax increase on military survivor benefits and certain other income received by children. 
• Removes provisions that would have allowed 529 education savings accounts to be used for homeschooling and more elementary and secondary school expenses. 
• Increases penalties for failing to file retirement plan information.

Senator Sanders’ Plan toTax Stock, Bond and Derivatives Trades

Democratic presidential candidate BernieSanders (I-VT) plans to introduce legislation that would impose a tax ontrades of all stocks, bonds and derivatives in the U.S., a move he says wouldhelp curb Wall Street speculation and help finance his campaign promise toprovide tuition-free college and cut student debt. Sanders has been promoting afinancial transactions tax since his run for the Democratic nomination in 2016.The plan he’s offering would apply a 0.5% tax rate for stock trades, a 0.1%rate for bond trades, and 0.005% for derivatives transactions.

May 31, 2019
Legislative Updates

Fixing 2017 Tax Law

The House Ways and Means Committee plan to hear members’ priorities during a hearing on June 4th. The agenda will likely include expired tax breaks, an issue that lawmakers will need to address before they can fix errors in the 2017 tax law. A lot of Ways and Means members remain interested in technical fixes, including addressing the “retail glitch.” That error in the 2017 law prevents restaurants and retailers from immediately writing off the costs of interior improvements. A preliminary draft of provisions for House legislation extending temporary tax breaks would renew the expired breaks through 2019 while tweaking the estate tax exemption. The draft document would let the estate tax exemption that went into effect after passage of the 2017 Republican tax law expire at the end of 2023 instead of at the end of 2025. The 2017 law expanded the exemption to $11.18 million per person, from $5.49 million. The estate tax change would bring in the government $25 billion, which would be enough to pay for the temporary tax breaks. A bill resembling the draft would be considered dead on arrival in the Senate, where Republicans are unlikely to entertain any change in the estate tax exemption.

In addition, U.S. Senate Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) just announced the formation of several bipartisan taskforces to examine temporary tax provisions that expired, or will expire, between December 31, 2017 and December 31, 2019 – a total of 42 provisions. The taskforces will be charged with examining tax policies within workforce and community development, health, energy, business cost recovery, and a combined group consisting of individual, excise and other temporary policies. A separate taskforce will examine whether there is a core package of tax relief provisions that should be available when natural disasters strike. AdvaMed is working to shape the health task force’s efforts regarding the Medical Device Tax as this still has not been permanently eliminated and is just on hold until the end of 2020.

Retirement Savings Overhaul
Individuals would have more flexibility to save for retirement and unrelated businesses could offer joint retirement plans under H.R. 1994, the Setting Every Community Up for Retirement Enhancement Act. The measure, introduced by Chairman Richard Neal (D-MA) would allow individuals to temporarily withdraw money from their retirement accounts following a birth or adoption, and would modify contribution limits and mandatory minimum distribution requirements for older Americans. It would also allow 529 education savings accounts to be used for apprenticeship fees and student loans. Most provisions would apply to plan years beginning after Dec. 31, 2019. The rule for floor debate would automatically modify the bill with a manager’s amendment from House Ways and Means Chairman Richard Neal (D-MA).

Relative to the committee-approved bill, Neal’s amendment:

  • Adds provisions to address an unintended effect of the 2017 tax overhaul (Public Law 115-97) that resulted in a tax increase on military survivor benefits and certain other income received by children.
  • Removes provisions that would have allowed 529 education savings accounts to be used for homeschooling and more elementary and secondary school expenses.
  • Increases penalties for failing to file retirement plan information.

Senator Sanders’ Plan to Tax Stock, Bond and Derivatives Trades

Democratic presidential candidate Bernie Sanders (I-VT) plans to introduce legislation that would impose a tax on trades of all stocks, bonds and derivatives in the U.S., a move he says would help curb Wall Street speculation and help finance his campaign promise to provide tuition-free college and cut student debt. Sanders has been promoting a financial transactions tax since his run for the Democratic nomination in 2016. The plan he’s offering would apply a 0.5% tax rate for stock trades, a 0.1% rate for bond trades, and 0.005% for derivatives transactions.