Middle Market Public Policy Roundup
Health care reform, tax treatment for pass-through businesses and changes to overtime exemption rules capped important headlines impacting the middle market this week.
Senate Republicans Struggle to Salvage Health Care Effort
Republicans in the Senate agreed to extend the deadline for any vote on health care legislation to after the July 4 recess, per a Reuters article. Currently, ten Senate Republicans, including conservative and moderate centrists, oppose the legislation. The Senate hopes to finalize a new draft of the bill before going home for recess, so they can vote when they return.
Any time spent on health care pulls time away from the already limited window for 2017 tax reform discussion. While Speaker of the House Paul Ryan [R-WI] and Chairman of the Ways and Means Committee Kevin Brady [R-TX] have stated they firmly believe that tax reform will happen in 2018, this is becoming increasingly unlikely.
Trump Economic Adviser: ‘Pass-Through’ Businesses One of the ‘Toughest Issues’ in Tax Reform
Dealing with tax reform for pass-through entities such as sole proprietorships, partnerships, LLCs and S corporations currently taxed at the individual income rate by way of the owner’s taxes, is one of most complicated issues Congress faces in tax reform, according to Gary Cohn, the economic adviser to the White House – according to a Hill article published this week.
Pass-through entities comprise much of the corporate tax base, especially in regard to small and midsize companies. The White House plan would have these businesses taxed at the corporate rate of 15 percent, though it proposed no means for keeping individuals from creating pass-through corporations to avoid taxes.
Trump Administration to Review Overtime Rule, Labor Secretary Says
The Department of Labor formally requested information from the Office of Management and Budget on the Obama-era overtime pay rule, according to Morning Consult. The overtime rule raised the salary threshold for overtime pay exemption from $23,660 to $47,476. Labor Secretary Alexander Acosta stated that the $47,000 threshold created by the Obama administration is overly burdensome to businesses in some parts of the country. Once approved, the process of receiving comments from interest groups and businesses will begin, helping to inform the decisions the Department of Labor makes regarding the rule.
Ben Marsico works on public policy issues for ACG.