• Estate Tax Relief and Minimum Wage Increase Bill Fails in Senate
• NASE Supports National Back-To-School Campaign to Get Kids Insured
• Senate Begins Series of Tax Reform Hearings
• House and Senate in Recess
• Member Poll: Health Care Decisions

Estate Tax Relief and Minimum Wage Increase Bill Fails in Senate

HR 5970, a bill that would have reduced the estate tax, extended various tax breaks and increase the minimum wage failed Thursday after the Senate could not invoke cloture on the bill with a vote of 56-42. Sixty votes are needed to end debate and allow a vote. Senate Majority Leader Bill Frist, R-Tenn., promised there would be another attempt to pass the bill, saying that “these issues must be addressed as a package — all or nothing.” However, Democrats voiced concerns that the bill would unfairly benefit the rich, be fiscally irresponsible, and actually reduce wages for tipped workers in certain states. Even a few Republicans were disappointed with the bill and the attempt to push several issues through as a package. Before the vote, Finance Chairman Charles Grassley, R-Iowa, strongly criticized Republican leadership for gambling everything at once, “on the wrong horses.” Although Grassley voted for cloture, he said that the only way to advance the bill through the Senate would be to work more closely with the Finance Committee. Democrats point to this as another example of a partisan Congress with Republican leadership that is unwilling to work together to achieve a successful compromise and criticized them for trying to buy Democratic votes with targeted sweeteners included in the bill. Republicans promised to use the Democrats’ votes opposing the minimum wage and the estate tax against them in the upcoming elections. Frist also said that he intends to actively campaign against several Democrats who voted against cloture. The future of the tax break extensions that were originally packaged with the pension overhaul is now also unclear. Senator Trent Lott, R-Miss., said the extensions might advance as a separate bill. However, when Senate Minority Leader Harry Reid, D-Nev., suggested this option, Frist strongly objected to it. The NASE will continue to follow this issue closely. For more on the NASE’s legislative priorities, visit http://advocacy.NASE.org. NASE Supports National Back-To-School Campaign to Get Kids Insured Access to affordable health coverage often eludes micro-business owners. This means their children go uninsured as well. Over 8 million children do not have health insurance in this country. The NASE recognizes the need for affordable health care coverage and is teaming up with many national organizations in support of Covering Kids & Families Back-to-School Campaign. Now in its seventh year, the campaign's goal is to encourage parents to enroll children in low-cost or free health coverage. Most of those uninsured children qualify for such programs as Medicaid, State Children's Health Insurance Programs (SCHIP), or other state-sponsored programs that will provide them with coverage, and some adults are eligible too. However, many people are either unaware of such programs or find it too complicated to enroll in them. Events will occur in all 50 states and the District of Columbia in August to inform families of their health options. The campaign will kick off in Washington, D.C., August 9, 2006. The messages of the Covering Kids and Families Back to School Campaign are simple: Low-cost or free health care coverage is available for many uninsured families. Enrolling children for health care coverage should be one of parents' main priorities, similar to buying school supplies. Healthy kids are better prepared to learn and perform well in school. “The Covering Kids & Families Back-to-School Campaign provides an important opportunity to help parents struggling to provide children with quality health care while not sacrificing other needs,” said Kristie Darien, executive director for the NASE legislative office. “We encourage all of our members to get involved with the events of this week in their communities.” The NASE works year-round to make health insurance more affordable for micro-business owners. The association continues to fight for the elimination of the self-employment tax on health insurance costs and supports health care tax credits, health savings accounts and small-business health plans. For more information on the NASE's position on health care, visit http://advocacy.nase.org/. Visit http://coveringkidsandfamilies.org/ for more information, updates, and a calendar of events in your area during the month of August. Senate Begins Series of Tax Reform Hearings Last week, the Senate Finance Committee started a series of hearings on federal tax reform. The first hearing, titled, “Kick-Off for Tax Reform,” included many members of the President’s Advisory Panel on Federal Tax Reform, Government Accountability Office Comptroller General David Walker, and Dr. Jane Garvelle of the Congressional Research Service. While Chairman of the Senate Finance Committee Charles Grassley, R-Iowa, said there were no preconceived notions of what future tax reform would entail, there was much focus at this hearing of eliminating the alternative minimum tax (AMT). In order to do so, however, revenues must be made up elsewhere. Last year the president’s tax reform panel recommended eliminating the deductibility of state and local taxes. Additionally, some recommend cutting the mortgage deduction and instead issue a tax credit equal to 15 percent of the interest paid. This would eliminate tax subsidies on second homes. “The complexity of, and frequent revisions to, the tax system make it more difficult and costly for taxpayers who want to comply to do so and for the IRS to explain and enforce tax laws,” testified Walker. “Complexity also creates a fertile ground for those intentionally seeking to evade taxes, and often trips other into unintentional noncompliance.” The committee plans on conducting hearings throughout the fall and early next year before trying to agree on a proposal to make major changes to the current tax season. Last year, the NASE submitted suggestions for tax code changes to the president’s panel. It focused both on simplification of the entire tax code and micro-business tax reform priorities. Many micro-business owners, home-based business owners, and the self-employed prepare their own taxes. The complexity and paperwork burden of the current tax system hinders them from getting all the deductions and returns possible. “The self-employed and micro-business owners are responsible for managing every aspect of their business. Every second spent contending with burdensome record keeping and tax preparation takes away from the time they expend running and growing their business,” said Robert Hughes, president of the NASE. “That is why the NASE urges the government to find ways to combine and simplify tax forms and instructions.” The NASE also advocates changes in the following areas: Elimination of the self-employment tax on health insurance premiums Home office deduction simplification Clarification of independent contractor classification Let your legislators know how you feel about federal tax reform by visiting the NASE’s online Legislative Action Center at http://advocacy.NASE.org. House and Senate in Recess The House and Senate have adjourned for summer recess, when they return to their districts for constituent work and vacation. Washington Watch will be on hiatus until September 6th during this recess, but will alert you of any pressing small-business issues. As always, you can stay up to date on the NASE advocacy efforts at http://advocacy.nase.org. Member Poll: Health Care Decisions 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.