The State of the Small Business Agenda - · PDF fileThe State of the Small Business Agenda ... Political Objectives in 2010 ... Businesses •A qualified

The State of the Small Business Agenda

A Look Ahead at NFIB's Top Legislative and Political Objectives in 2010

Presented by NFIB staff from the Federal Public Policy and Political departments

[Download these slides at www.nfib.com/sbagenda ]

What we’ll discuss

• Healthcare – Michelle Dimarob, Manager, Legislative Affairs – House

• Taxes – Bill Rys, Tax Counsel• Labor – Brad Close, Vice President, Federal Public Policy

• Cap and Trade – Brad Close, Vice President, Federal Public Policy

• 2010 Elections – Lisa Goeas, Vice President, Political


Poll #1

Healthcare

Michelle DimarobManager, Legislative Affairs – House


Small Business Yes and No List

Yes

• Vouchers: voluntarily contribute tax‐free to an employee’s individually‐owned plan

• Pooling across state lines • Responsible insurance market

reforms • Standardized benefit packages • SIMPLE cafeteria plans • Self‐employed tax equity • Meaningful liability reform

No

• Employer mandates • New taxes on small business health

insurance • Union and big business carve‐outs • Medicare payroll tax hikes• New paperwork burdens and fees • Prohibitions on HSAs, FSAs and HRAs

that limit employer and employee flexibility and choice


The Fork in the Road:Pathways for Health Reform

Pathway 1Small is Beautiful (maybe)

• Incremental Reform• Option A

– Scaled back version of already passed bills

– Politically problematic• Option B

– Separate, small, new bills– Bipartisan possibilities

Pathway 2Big is Bad

• Pass Senate bill• “Correction” Bills

– Reconciliation (51)– Procedurally challenging


Future of HealthcareDo you support or oppose President Obama’s health care plan, or do you not have an opinion?

• Support ............ 36%

• Oppose .............51%

• No Opinion....... 13%Public Polling Company (2/2/10)


Healthcare Fall 2010

If the Democrats don’t pass their health care bill will you vote Democratic or Republican for Congress this fall?

• Democratic............ 38%

• Republican.............43%

• Undecided............. 19%Public Polling Company (2/2/10)


Healthcare Fall 2010If the Democrats pass their health care bill will you vote Democratic or Republican for Congress this fall?

• Democratic............... 41%• Republican........ ……45%• Undecided................ 14%

Public Polling Company (2/2/10)


FY 2011 Budget

• Assumes that the enactment of comprehensive health reform will result in $150 billion in savings over the next ten years

• Assistance to States• Extends COBRA Subsidies• Prevention and Wellness • Community health centers • Health Information Technology (HIT)• Comparative effectiveness research

Anything Missing?Anything Missing?Lower Costs, More Choice and Real CompetitionLower Costs, More Choice and Real Competition



Poll #2

Taxes

Bill Rys, Tax Counsel

Taxes and Small Business:What Do We Fight For?

• Lower rates

• Business growth and development

• Reduce complexity


Economic Growth and Tax Relief Reconciliation Act of 2001:

Lowered Individual Rates

Individual Income Tax Rates 2010

$1 ‐ $8,375= 10%

$8,375 ‐ $34,000= 15%

$34,000 ‐ $82,400= 25%

$82,400 ‐ $171,850= 28%

$171,850 ‐ $373,650= 33%

$373,650 ‐ above= 35%

Individual Income Tax Rates

$1 ‐ $27,050= 15%

$27,051 ‐ $65,550= 27.5%

$65,550 ‐ $136,750= 30.5%

$136.751 ‐ $297,350= 35.5%

$297,351 – above= 39.1%

Current2001


Economic Growth and Tax Relief Reconciliation Act of 2001:Lowered and eliminated the death tax

Death Tax

2010 – FULLY REPEALED

Death Tax

2001 – 55%, $1 million exemption

Current2001


Job Growth and Tax Relief Reconciliation Act of 2003:

Increased Section 179 Small Business Expensing

Small Business Expensing

2008 ‐ $250,000 deduction, overall investment limit of $800,0000 (one‐time economic stimulus benefit).

2009/2010 ‐ $130,000 (est.) deduction, overall investment limit of $500,000

Small Business Expensing Expires

2003 ‐ $25,000 deduction, overall investment limit of $200,000

Current2003


Job Growth and Tax ReliefReconciliation Act of 2003:

Reduced Capital Gains Rate

Capital Gains Rate: 15%

Capital Gains Rate: 20%

Current2003


Midnight on December 31, 2010

All of the tax provisions just mentioned expire

• Higher individual rates

• Death tax rate to 55 percent and a $1 million exemption

• Small business expensing ‐ $25,000

• Capital gains – 20 percent

• Administration’s 2011 Budget Proposal would extend lower rates and lower capital gains rate unless the taxpayer earns more than $200,000 filing individually, or $250,000 for joint filers


Jobs Bill ProposalThe Administration and Congress is considering a “jobs” bill to help address the lagging employment numbers. The Administration has proposed the following –

• Jobs and Wage Tax Cut • $5000 tax credit against payroll tax for each new hire in 2010, with a

maximum amount of credit of $500,000 • No payroll taxes owed on any increase in wages in 2010.

• Increase Expensing• Extend the $250,000 first‐year deduction for investments in new

equipment.

• Zero Capital Gains for Investment in Qualified Small Businesses• A qualified small business only includes C Corps, not pass through

businesses which account for 75% of small businesses. • The zero rate would only apply to the sale of stock and not other

capital assets.

Poll #3

Labor

Brad CloseVice President, Federal Public Policy

Employee Free Choice ActLabor’s #1 Issue

• Labor unions spent over $400 million dollars during the 2008 elections electing pro‐union candidates – their main goal is to enact this legislation.

• The Employee Free Choice Act (EFCA), or as we like to call it, the Employee Forced Choice Act, is designed to reverse the decades‐long decline in private‐sector union membership, which is currently about 7.2%


What the EFCA Does• Allows unions to organize a business without the owner’s knowledge or involvement

• Revokes the owner’s legal right to ask for a secret ballot election

• Forces owners who do not agree to a contract into mandatory, binding arbitration decided by a federal bureaucrat

• Triples damages on business owners who violate the law during an organizing drive, even if it is done “unknowingly” ‐‐‐ fines on unions who break the law are not tripled.


Prospects for Card Check in 2010• Possible compromise vote in Senate – instead of getting rid of secret

ballot elections, would include:– Quickie elections – within 5‐10 days of a petition being certified by

NLRB– Union organizers given access to the workplace– Prohibition on employers speaking to their employees in large groups

during an organizing drive• Administration may very well try to enact parts of this bill through the

National Labor Relations Board (NLRB)

• Special Assistant To The President At The AFL‐CIO Stewart Acuff: “We are very close to the 60 votes we need. It we aren't able to pass the Employee Free Choice Act, we will work with President Obama and Vice President Biden and their appointees to the National Labor Relations Board to change the rules governing forming a union through administrative action…”


Other Labor Agenda Items

• Paid leave policies – bills pending in Congress that mandate 1) 7 days paid sick leave per employee for firms with more than 15 employees; 2) paid family and medical leave for up to 12 weeks; and 3) 1‐2 weeks of mandated paid vacation time, depending on firm size.

• Project Labor Agreements – requires businesses that participate in federal contract work to use local union halls for their labor pools. This language was attached to the Stimulus bill last year.


Poll #4

Cap and Trade

Cap and Trade• Passed the House of Representatives last June by a slim 2

vote margin. • Pending in the Senate• Bill would set up a cap‐and‐trade system, where utility

companies who emit carbon would purchase “carbon credits”from the government to offset their emissions.

• These costs will be passed down to small business owners and consumers.

• Duke Energy already filed for a rate increase in anticipation ofCap and Trade being enacted.

• Estimates range that a Cap and Trade system could increase your energy costs by 5‐40%


Does the public support cap and trade?

• NFIB just released two polls on the issue – we asked small business owners and the general voting public their opinions and they both opposed the legislation.

• Key Findings:– 66% of small business owners and managers, and 52% of voters oppose a federal cap and trade system.

– 71% of small business owners and managers, and 57% of voters believe a federal cap and trade system would increase energy costs.


What Happens to Cap and Trade Now?

• Sen. Barbara Boxer (CA) has indicated she wants to press ahead with her cap and trade bill, and the President asked for a bill in his State of the Union address

• But Senate moderates are indicating they will not vote for this bill, and it seems unlikely now that it can pass.

• However, the administration does plan to push this proposal through EPA, using the regulatory process –Energy Secretary Chu said that if Congress won’t do it, they will.


The 2010 Elections

Lisa GoeasVice President, Political

2010 Gubernatorial OutlookDemocrats: 8 Term‐limited, 9

Incumbents, and 2 Retiring • 4 Toss‐ups• Lean/Likely D • 4 Lean/Likely R• 4 Safe

Republicans: 7 Term‐limited, 8 Incumbents, and 3 Retiring• 10 Toss‐ups• 5 Lean/Likely R • 0 Lean/Likely D• 3 Safe


2010 Senate OutlookDemocrats: 4 Retiring; 14

Incumbents• 7 Toss‐ups• 2 Lean/Likely D • 1 Lean/Likely R• 8 Safe

Republicans: 6 Retiring; 12 Incumbents• 4 Toss‐ups• 3 Lean/Likely R • 0 Lean/Likely D• 11 Safe


2010 U.S. House Outlook

Democrats in Districts:

Carried by McCain – 49

Carried by Bush – 83

Carried by Bush 2004 and McCain 2008 – 48

Elected with 55% or less ‐ 28

Republicans in Districts:

Carried by Obama – 34

Carried by Kerry – 6

Carried by Kerry 2004 and Obama 2008 – 6

Elected with 55% or less ‐ 30


NFIB Candidate Meetings(2010 v. 2008 cycle comparison)

1012Members

64Special

03Primary Challenger

2950Challenger

1825Open

5382Total Candidates

4770House

611Senate

01Governor

January 2007 –January 2008January 2009 - January 2010


Redistricting

“Winners”(+4) Texas (+1) Arizona, Florida,

Georgia, Nevada, South Carolina, Utah, Washington

“Losers”(‐2) Ohio(‐1) Illinois, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, New York, Pennsylvania


Questions?

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