Volume 4 -- Issue 40 -- October 25, 2007
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Tax
AGC to Fight Tax Hikes Included in Legislation Designed to Repeal Alternative Minimum Tax
Highway Issues
AGC Leaders Visit Capitol Hill to Discuss Highway Reauthorization—Encourage Creation of Highway User Rate Commission
WRDA
Congress Delivers WRDA to White House — AGC Calls on President to Sign Bill

  AGC to Fight Tax Hikes Included in Legislation Designed to Repeal Alternative Minimum Tax
Democrats call it “The mother of all tax reform” Republicans call it “The mother of all tax increases”

AGC views this legislation as especially punitive to closely held businesses such as S-Corps, LLCs and LLPs. House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) introduced his tax bill today, which includes a one-year patch of the Alternative Minimum Tax (AMT) and an eventual repeal of AMT paid for with a tax hike on AGC pass-thru companies. S corps, LLC and LLP businesses will face the sharpest increase under the bill.

While the bill lowers the C Corps tax to 30.5 percent, unfortunately it also places a 4 percent surcharge on adjusted gross income for tax payers with more than $150,000, or $200,000 of income annually for a couple. To make matters worse, the bill does not extend the tax rates that are currently in place so the top rate will rise from 35 percent today to about 44 percent after the current tax rates expire in 2011. In addition, the bill repeals the section 199 tax deduction for construction, amounting to another 3 percent increase. Finally, the bill forces S Corp service providers, such as engineers and CPA’s, to pay payroll taxes on all income, regardless if it should be treated as payroll or dividend (or distributive share) income.
 
AGC is educating Members of Congress on the harmful effects of this legislation, especially the way it treats S Corps and C Corps differently, penalizing small business owners for choosing the pass-thru method.

For more information, contact Heidi Blumenthal at blumenthalh@agc.org or (202) 547-8892.  [ return to top ]

  AGC Leaders Visit Capitol Hill to Discuss Highway Reauthorization—Encourage Creation of Highway User Rate Commission

This week, AGC President Steve Massie, Highway and Transportation Division Chairman Brian Burgett, Vice Chairman Scott Williams and Vice Chairman-Elect Don Weaver visited key members of the House to discuss reauthorization initiatives.

(L to R) President Steve Massie, H&T Division Chairman Brian Burgett, H&T Vice chairman Scott Williams, House T&I Committee Chairman Jim Oberstar and H&T Division Vice Chairman-elect Don Weaver meet to discuss highway funding. 
 
The AGC group met with House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.), Highways and Transit Subcommittee Chairman Peter DeFazio (R-Ore.) and Subcommittee Rankling Member Jimmy Duncan (R-Tenn.).
 
AGC presented a key proposal to raise the user fee and the creation of a Highway User Rate Commission and pointed out that a user fee increase will be necessary in order to make any headway against increasing highway investment needs.

In addition, AGC reported that its economist forecasts that growing world demand will continue to keep upward pressure on highway construction material costs.  This will require that the user fee keep pace with the ever-increasing cost of construction if progress is to be made. AGC recommended the creation of a Highway User Rate Commission that would be charged with annually assessing highway and bridge needs, inflation and other factors and determine where the user rate should be set. The concept is to allow the Commission to recommend a user fee increase that would be automatically implemented unless it were disapproved by a super majority in Congress. The intent is to take the decision to raise the user fee out of the political realm. There was much interest in the idea among the Congressional leaders.
 
The AGC leadership also discussed working closely with the Congressional leaders to create the grass roots support necessary for increased funding, other revenue sources and ensuring that sufficient revenue is available to fully fund SAFETEA-LU in its final two years.
 
For more information, contact Brian Deery at
deeryb@agc.org or (703) 837-5319. [ return to top ]

  Congress Delivers WRDA to White House — AGC Calls on President to Sign Bill

On Tuesday the Congress delivered the Water Resources Development Act of 2007 (WRDA) to the White House for President Bush’s signature.

Despite numerous calls by AGC and a wide variety of interests in the water resources community, it is expected that President Bush will veto the legislation (H.R. 1495). In a letter to the White House AGC CEO Stephen E. Sandherr said, “reauthorizing the Water Resources Development Act after seven long years will go a long way toward maintaining our economic competitiveness and national security, by enabling us to reprioritize and wisely invest in a comprehensive program to properly maintain, repair and replace our critical infrastructure. Mr. President, I urge you to reconsider your veto threat and sign H.R. 1495 into law.”

H.R. 1495 authorizes $23 billion in civil works projects administered by the U.S. Army Corps of Engineers.  The biennial legislation has not been enacted since 2000.  AGC strongly supports WRDA and will support efforts to override a presidential veto by Congress. 

For more information, contact Marco Giamberardino at giamberm@agc.org or (703) 837-5325. [ return to top ]