In the Senate, members of the tax-writing Senate Finance Committee are participating in at least one of five working groups set up by Chairman Orrin Hatch (R-UT) to focus on different areas of tax policy: individual income tax, business income tax, savings & investment, international tax, and community development & infrastructure. The committee is soliciting stakeholder input through April 15. Find out more on the Finance Committee website: http://www.finance.senate.gov/.
So far, the House is taking the incremental approach to tax reform. In previous columns, I’ve reported on House passage of permanent increased Sec. 179 expensing. Your help is needed in getting the message to your members of Congress that Sec. 179 expensing must be dealt with before the end of the year!
Death tax repeal introduced in Senate, advances in House
Sen. John Thune (R-SD) and 27 Republican cosponsors recently reintroduced legislation to permanently repeal the federal estate tax or “death tax.” The Death Tax Repeal Act of 2015 (S. 860) is identical to House bill H.R. 1105, introduced by Rep. Kevin Brady (R-TX) and approved by the House Ways & Means Committee on a party line vote. The legislation has garnered strong support from the business community and Congressional Republicans. However, it has only one Democratic sponsor, Rep. Stanford Bishop (D-GA). Some Democrats on the Ways & Means Committee have shown interest in introducing an alternative bill that would create an estate tax exemption for small farms and family businesses.
Democrats in Congress aren’t the only hurdle supporters of repeal face. President Obama has proposed increasing the top death tax rate from 40 percent to 45 percent while reducing the exemption from $5.43 million to $3.5 million. Plus, repeal comes with a hefty price tag. According to the Joint Committee on Taxation, a repeal of the estate tax would cost approximately $295 billion. Make your voice heard by calling on your members of Congress to support family-owned manufacturing companies by supporting death tax repeal.
House and Senate move to rein in spending
The Senate passed a 10-year balanced budget blueprint after a marathon “vote-a-rama,” considering 40 non-binding amendments before the final vote. The plan seeks $5.1 trillion in domestic spending cuts over 10 years to boost military funding and balance the budget. Days earlier, the House narrowly passed its $3.5 trillion budget blueprint that also relies on steep spending cuts to eliminate deficits over the next decade, calls for repealing the Affordable Care Act, and envisions overhauling the tax code and Medicare. Both plans also matched the defense spending number of $612 billion from the president’s budget. The blueprints differ, however, in how far they go in entitlement and Medicare reform. Now comes the hard part – reconciling the differences and coming up with one plan by the April 15 statutory deadline that both chambers can agree on for the first time in years.
The plans themselves are non-binding and do not require a presidential signature. Even though neither chambers’ visions will become law, they are nevertheless important policy statements that influence future legislation and upcoming election campaigns.
Administration announces three new manufacturing initiatives
President Obama announced nearly $500 million in public-private investment in three initiatives meant to strengthen American manufacturing. The first is a competition for manufacturers, universities, and non-profits to form a new textiles-focused manufacturing institute led by the Department of Defense. The Revolutionary Fibers and Textiles Manufacturing Innovation Institute will be the ninth such effort in the Obama Administration’s vision of a National Network for Manufacturing Innovation. The administration’s FY2016 budget doubles the number of institutes nationwide to 16 by the end of 2016.
Second, the administration is attempting to improve the resources available to small manufacturers through the Manufacturing Extension Partnership (MEP) program with the announcement of competitions for non-profits in twelve states to provide technology and engineering expertise and ultimately strengthen the MEP. AMT has advocated consistently for a more value-driven MEP model.
Lastly, the White House, responding to its recently released report, “Supply Chain Innovation: Strengthening America’s Small Manufacturers,” is launching a Supply Chain Innovation Initiative focused on building public-private partnerships that will strengthen the small manufacturers that anchor the nation’s supply chains. To find out more about the White House manufacturing initiatives, visit www.manufacturing.gov.