August 2, 2006
- Minimum Wage and Estate Tax Relief Rolled into House Bill
- NASE Members Give Back to the Community
- House Democrats Unveil Small-Business Scorecard
- Member Poll: Health Care Decisions
Minimum Wage and Estate Tax Relief Rolled into House Bill
There was a lot of activity in the House of Representatives last week before they left Washington, D.C., for their August recess. The House passed a hybrid bill (H.R. 5970) that includes an estate tax reduction, extensions of several business tax breaks, some new tax breaks, and an increase in the federal minimum wage by $2.10 per hour.
Originally, Republican leadership in the Senate wanted to add these provisions to a pension bill, passed by both chambers but with slight differences. The pension bill was in conference, where negotiators from the House and Senate were working out these differences. The negotiators did so, but did not want to include the controversial estate tax and minimum wage provisions to the pension legislation because they feared it would doom the bill. Instead, the House passed the pension changes agreed to in conference (H.R. 4) and H.R. 5970 separately, leaving the outcome of the bills to the Senate.
Some of the provisions of H.R. 5970 include:
An increased estate and gift tax exemption, reaching $5 million per individual ($10 million per couple) in 2015 A change in the tax rate for estates between the maximum exemption and $25 million to the maximum capital gains rate, currently 15 percent (scheduled to increase to 20 percent in 2011) A lower tax rate on estates larger than $25 million, starting at 40 percent in 2010 and dropping to 30 percent in 2015 A new markets tax credit for taxpayers investing in businesses in qualified low-income neighborhoods A new type of tax-credit bond to finance development in rural areas An increase in the minimum wage over three years, from the current $5.15 per hour to $5.85 an hour on Jan. 1, 2007; $6.55 on June 1, 2008; and $7.25 on June 1, 2009
The bill will now go to the Senate, where Republicans hope that Senate Democrats will feel pressured to vote for the bill because they have made the minimum wage increase a major issue.
However, Senate Minority Leader Harry Reid (D – Nev.) has vowed the bill will fail. “The Senate has rejected fiscally irresponsible estate tax giveaways before and will reject them again,” Reid said. “Blackmailing working families will not change that outcome.”
The move has potentially far reaching political implications considering that an increase in the federal minimum wage has been a long standing priority for the Democratic Party. On the other hand, if the entire package is rejected, it will underscore the Democrats’ claims that the current Congress is ineffective and too partisan to work together. Both sides hope to use this to their advantage in the November midterm elections.
Let your legislators know how you feel about H.R. 5970 by visiting the NASE’s online Legislative Action Center at http://advocacy.NASE.org.
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NASE Members Give Back to the Community
Over 90 percent of micro-business owners give charitable donations to a variety of organizations, according to a recent online member poll conducted by the NASE. Forty-five percent of respondents give $1,000 or more each year.
“People always say that small shops are the backbone of our nation’s economy, but they are also the backbone of our communities,” said NASE president Robert Hughes. “Micro-business owners are making important donations to organizations they see as critical to the community they live in.”
According to the NASE survey, the types of charities or efforts micro-business owners have given donations to in the last year include:
| Religious organizations/ Your place of worship |
57.7% |
| Local non-profits, organizations, and charities |
54.3% |
| National non-profits, organizations and charities |
49.9% |
| Schools |
35.3% |
| Youth leagues (i.e. after school programs, sports, etc.) |
22.7% |
| Community initiatives (i.e. public parks, community centers, shelters, etc.) |
17.4% |
| Other |
10.3% |
When asked why they contributed to charities, nonprofits, and local programs, 71 percent of respondents said they believed in the mission of the cause and nearly half (49 percent) wanted to give back to the community. Less than one-quarter (23 percent) cited tax benefits and about 9 percent said it expands awareness and positive view of the business in the community.
For the full results of the survey, visit http://advocacy.nase.org/membersurvey/default.asp.
Methodology:
Posted in the members-only portal on the NASE Web site, the survey was available for members to take during the month of July. Seven hundred NASE Members opted-in to the non-scientific survey and members were prohibited from taking it more than once.
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House Democrats Unveil Small-Business Scorecard
A report by Democrats on the House Small Business Committee found that the federal government had miscoded nearly $12 billion as small-business contracts that had actually been awarded to large businesses.
With the miscoding, small businesses were awarded only 21.6 percent of federal contracts, not the 25 percent claimed by the federal government. This means that the government has failed to reach its small-business contracting goal for the sixth consecutive year.
The report also found that over 2,500 large companies or ineligible entities were awarded contracts. Of these, only 3 percent were certified eligible small businesses that grew larger.
In addition, the report offered a “scorecard” for each government agency on meeting federal small-business contracting standards. Twelve agencies received failing grades on the scorecard, and the overall federal government received a D, the lowest score in the history of the report.
“What we need to see today is action,” said Ranking Minority Member Nydia Velazquez. “These are not just numbers or issues; these are real problems for real life small business owners that must come to an end.”
Committee Democrats called on the Government Accountability Office to investigate whether large businesses are intentionally certifying as small or if contracting officers are intentionally miscoding to meet small-business contracting goals.
They also plan to send letters to all of the large businesses and ineligible entities informing them that they are in violation of the law and asking them take responsibility and remove themselves from the small-business lists.
The NASE will continue to follow this issue closely. The NASE’s legislative priorities can be found at http://advocacy.NASE.org.
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Member Poll: Health Care Decisions
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As a micro-business owner, you are responsible for making big decisions every day that affect both your business and your family. One of the most important choices you make is regarding your health coverage. Let the NASE know how often you review your health coverage by visiting the MyNASE Web site at http://my.NASE.org/. Log in to your free MyNASE Web account. If you have not set up an account, you can do so at http://my.NASE.org/ with your member number.
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