• Support From Presidential Candidates Not Enough To
  Pass Earmark Moratorium
• Independent Panel To Police House Members Welcomed, Scorned
• Congress Evaluates Estate Tax

Support From Presidential Candidates Not Enough To Pass Earmark Moratorium

Both the Senate and the House have overwhelmingly rejected amendments to the fiscal 2009 budget resolutions that would have placed a moratorium on earmarks. Also known as “pork-barrel spending,” or simply “pork,” earmarks are appropriations funneled by a member of Congress into his or her district and directed towards specific projects. These requests may be included in bills without a vote and with little to no oversight. The practice has drawn fire recently due to certain high profile spending, such as the “bridge to nowhere” proposed by Sen. Ted Stevens, R-Alaska, in 2005. The Senate version of the amendment that would have instituted a moratorium was sponsored by Sen. Jim DeMint, R-S.C. Sen. DeMint has become fiercely anti-earmark in the aftermath of the 2006 election in which he feels the Republicans lost partly because they abandoned their mantra of fiscal conservatism. This issue has surfaced in the presidential race. Senator John McCain, R-Ariz., has strong credentials in this area and made it a central issue of his campaign. He was also the first presidential candidate to sign up as a cosponsor of the bill, issuing a challenge to Sens. Obama, D-Ill., and Clinton, D-N.Y., to join him. Both did, a tactic which pundits have argued they were required to do to shield themselves from the issue during the general election.

Independent Panel To Police House Members Welcomed, Scorned Lawmakers recently approved the creation of an independent ethics panel, which would review cases and send those with merit to the internal House Committee on Standards of Official Conduct for further investigation or disciplinary action. The Democrat-led Congress has taken steps to improve its public image after scandals from members of both parties have captured headlines in past years. However, the proposal faces tough opposition from lawmakers, including House Minority Leader John A. Boehner, R-Ohio, who sees it as another way to impart partisan fighting through the “fil[ing] of frivolous complaints.” Members of the proposed Office of Congressional Ethics would be chosen by House leadership Speaker Nancy Pelosi, D-Calif., and Minority Leader John A. Boehner, R-Ohio. Acting House lawmakers would be ineligible to participate in the panel. At present, both Chambers of Congress are monitored by ethics committees which serve as resources on up-to-date guidelines on how to handle common issues such as the acceptance of gifts, how to conduct campaign activities and more. However, the Ethics Committees have not been proactive in the past few years and have faced criticism for this lack of action as an array of Members of Congress face criminal investigations.

Congress Evaluates Estate Tax The Senate Finance Committee last week continued its discussion of the nation’s Estate Tax law, which is set to repeal in 2010 with no taxes on estates of any size, but then revert back to an earlier tax level the next year. It’s a situation created by the Bush tax act of 2001. The tax law allowed for larger estates each year to be exempt from paying estate taxes, until a full repeal of the estate tax in 2010. But the repeal is only temporary, creating an unusual situation where the tax will disappear one year, then revert back to its 2001 level the next – taxes of about 55 percent on estates over $1 million. At a committee hearing on the subject last week, witnesses were generally favorable to the philosophy behind some form of a tax on estates. They explained that a tax diminishes economic disparities and promotes social mobility across generations. The hearing focused on using an inheritance-oriented tax, as opposed to an estate tax. Rather than the current system, which focuses on the size of the overall estate, this system would focus on how much a given individual received. The proposals for how to do this varied, but included folding inheritances into the income tax, or modifying the current estate tax to focus on the recipient. The NASE has followed the changes in the estate tax law closely. The NASE supports permanently raising the threshold of the estate and gift tax exemption to a minimum of $5 million, to bring relief to micro-businesses and small farms. For more information on the hearing, please visit http://finance.senate.gov/sitepages/hearings.htm.   Trying To Navigate Your Business Taxes? The NASE Can Help   This small-group, two-hour seminar offers close access to a CPA specializing in taxes affecting the self-employed. Find hidden deductions Employ your spouse or children Learn Tax Code changes for 2007 Enjoy breakfast and networking with fellow micro-business owners in your community Learn more online at www.NASE.org/taxseminars. Lawmakers and media outlets across the country rely on and regularly cite the NASE as a source of small and micro-business expertise. Help the NASE make sure the micro-business perspective is heard by taking this month’s poll. Click here to log-in and participate. Washington Watch Online Visit the NASE Advocacy Web page to view archived editions of Washington Watch. While you’re there, read the latest updates from the Washington, D.C. office, write your Congressperson, and find out how you can join the fight for micro-business. Web site: http://advocacy.NASE.org.