President Unveils Unified Framework on Federal Tax Reform
Yesterday, President Trump unveiled a “Unified Framework for Fixing Our Broken Tax Code” that will serve as a template for the Congressional tax-writing committees – the House Committee on Ways and Means and the Senate Committee on Finance – to develop federal tax relief\reform legislation. The most consequential provisions for small employers and their employees are:
- Limit the maximum tax rate applied to the business income of small and family-owned businesses conducted as sole proprietorships, partnerships and S corporations to 25%;
- Reduce the corporate tax rate to 20%;
- Allow businesses to expense the cost of new investments in depreciable assets other than structures made after September 27, 2017, for at least five years;
- Repeal the death tax, the generation-skipping transfer tax, the individual Alternative Minimum Tax (AMT) and the corporate AMT;
- Partially limit the deduction for net interest expense incurred by C-corporations;
- Preserve business credits for research & development;
- Consolidate the seven federal individual income tax brackets into three brackets of 12%, 25% and 35%;
- Eliminate most itemized deductions, but retain tax incentives for home mortgage interest and charitable contributions; and
- Double the standard deduction to $24,000 for married taxpayers filing jointly and $12,000 for single filers via consolidation of existing standard deduction and personal exemptions.
Governor Walker Announces Small Business Agenda
On Tuesday, the Governor announced a four-step approach to help and strengthen Wisconsin small businesses. The elements of his Small Business Agenda are:
- Reduce business costs by lowering property taxes; stopping unemployment insurance fraud; streamlining regulations and reducing frivolous lawsuits;
- Prepare the workforce by investing in K-12 education, increasing worker training, expanding technical college educational opportunities; and strengthen ties between the UW System and the workforce;
- Remove barriers to work by ending the public assistance benefits cliffs; requiring able-bodied adults to work or receive employability training; require able-bodied adults to pass a drug test before receiving public assistance; and target specific populations – veterans, people with disabilities and ex-offenders – to enter the workforce; and
- Attract new talent by marketing workforce opportunities within Wisconsin.
We intend to work with the Governor and the Wisconsin State Legislature on these pro-small business initiatives. Of particular interest to WIB are the Governor’s initiatives to reduce businesses costs.
While the Governor did not specifically indicate the steps he would take to lower property taxes, we believe full repeal of Wisconsin’s personal property tax would definitely reduce the property tax burden on small employers.
With the support of WIB, state lawmakers have created stiffer civil and monetary penalties for Unemployment Insurance (UI) fraud. From our perspective, tougher criminal penalties for individuals convicted of UI fraud is the next logical step.
The Governor endorsed the “Sunset Clause” legislation as a means to streamline state government regulations. Under this legislation, every chapter in Wisconsin’s code of regulations would be subject to re-approval, modification or repeal every seven years. WIB has already been lobbying state lawmakers to enact this legislation.
While the Governor did not specifically indicate the steps he would take to reduce frivolous lawsuits, WIB has consistently supported legislation that will help reduce unnecessary litigation costs for small employers.
Governor Appoints Dan Meyer to Lead DNR
On Monday, Governor Walker appointed Dan Meyer to serve as Secretary of the Department of Natural Resources (DNR).
Dan Meyer represented the citizens of Oneida and Vilas County in the Wisconsin State Assembly from 2001 to 2013. Prior to that, he served as Mayor of Eagle River and the Executive Director of the Eagle River Chamber of Commerce and Visitors Center.
We applaud the Governor’s decision. The DNR has broad and far-reaching regulatory authority over business actions and activities which impact the land, air and water. Secretary Meyer’s legislative experience, local government background and work with hometown businesses will be put to good use.