Latest from the Blog
Main Street Supports New Taxpayer Protection Legislation
The Main Street Employers Coalition joined with over 40 national organizations in support of H.R. 23, the Family and Small Business Taxpayer Protection Act. The bill would rescind billions in questionable funding enacted in 2022 by the previous congress which expanded the Internal Revenue Service’s (IRS) audit enforcement activities, while doing little to improve woefully inadequate taxpayer service. To access a copy of the letter, please click here. Read More
S-CORP Podcast on Heightened Interest in the Employee Retention Credit
What’s the real story behind all these firms offering a big payday through the Employee Retention Credit? The S Corporation Association’s latest podcast, featuring veteran tax practitioner Lynn Mucenski-Keck, has all the answers. The episode is available at the link below, or through your favorite podcast app: Talking Taxes in a Truck Episode 24: “I’m Worried About Everything” Read More
ENABLERS Act Opposed by 75+ Trade Associations
Today, the Main Street Employers Coalition joined with dozens of its trade association allies to oppose the ENABLERS Act, legislation that would put some 30 million law-abiding small businesses in the crosshairs of federal law enforcement. At its core, the ENABLERS Act relies on criminals, including the lawyers and other financial professionals who assist them, to voluntarily provide an accurate picture of their activities to Treasury. As the letter... Read More
Main Street Asks Congress to Reject the Inflation Reduction Act
Today, the Main Street Employers Coalition joined with more than 70 trade associations in opposing the Inflation Reduction Act. A letter sent to lawmakers highlighted the various tax provisions that are harmful to the small and family-owned business community, and points out that now is simply not the time to be raising taxes on these employers. The letter, which can be accessed by clicking here, reads: The undersigned organizations... Read More
MSEC: The Inflation Reduction Act Fails to Address the Challenges Facing Main Street
“The Main Street Employers Coalition – comprised of national trade groups representing individually and family-owned businesses employing millions of Americans in every state – believes the “Inflation Reduction Act” would fail to address the major challenges confronting Main Street today: high inflation, a slow economy, and a tight labor market. “Recent NFIB member surveys make clear that inflation is the number one concern for Main Street businesses right now.... Read More
Main Street Unites Against Senate Democrats’ Tax Rate Hike
The Main Street Employers Coalition joined with more than 190 business organizations, representing millions of Main Street businesses and tens of millions of American workers, to oppose Senate Democrats effort to raise tax rates on individually and family-owned businesses. The latest proposal includes a 3.8 percent tax rate hike on the active income of 1 million businesses struggling with high inflation and looming recession fears. The letter makes it... Read More
Statement from the MSEC Opposing Inflationary Tax Hikes on Individually & Family Owned Businesses
Main Street Opposes Inflationary Tax Hikes on Individually & Family-Owned Businesses “It’s the kind of thing you’d do to start a recession, not prevent one.” WASHINGTON, D.C. (July 11, 2022) – The Main Street Employers Coalition—comprised of national trade groups representing individually and family-owned businesses employing millions of Americans in every state and district—released the following statement on a Democratic plan to raise tax rates on individually and family-owned businesses: “We... Read More
Inflation, Taxes, and Family Businesses – What do Voters Really Think?
Our allies at the S Corporation Association recently held a webinar to highlight the results of its new national survey. David Winston, whose research and polling firm conducted the survey, was on hand to break down the results and explain how voters feel about inflation, the Build Back Better Act, the current state of the economy, and their potential impact on November’s elections. As David made clear, the polling... Read More
Main Street Business Summit – Join Us April 15th
PMSE Statement in Support of 199A Permanence Bill
Today the Parity for Main Street Employers Coalition of national groups representing millions of individually and family owned businesses announced its strong support for the Main Street Tax Certainty Act of 2021, which would make permanent the Section 199A 20-percent deduction for qualified business income.
“We thank Representatives Smith and Cuellar, and Senators Daines, Cassidy, Scott (SC), and Portman for their bipartisan leadership on this important legislation to ensure permanent tax parity for individually and family owned businesses,” stated PMSE Executive Director Chris Smith. “Making Section 199A permanent would provide much-needed certainty so Main Street employers can move forward with confidence after being so hard hit by COVID-19 closures. The sooner Congress acts to make Section 199A permanent, the sooner Main Street communities will recover.
The section 199A deduction is an essential feature of the tax code to ensure tax parity between millions of individually and family owned businesses and C corporations. These employers–organized as S corporations, partnerships and sole proprietorships–are the backbone of the American economy, employing the majority of private-sector workers and representing 95 percent of all businesses. Despite the economic importance of the pass-through sector for jobs and growth, Section 199A is scheduled to sunset at the end of 2025, resulting in a draconian tax increase on the country’s most significant source of employment.
PMSE Statement (PDF)
New York Joins SALT Parity Effort
The good news on SALT Parity keeps rolling in. Just days after California’s Governor signaled his support, New York Governor Andrew Cuomo followed suit and included our pass-through SALT Parity language in his 2022 fiscal year budget proposal.
The briefing book accompanying Governor Cuomo’s budget proposal makes clear the state adopted our recommendations in their latest proposal:
The Budget includes a new voluntary Pass-Through Entity Tax designed to mitigate the impact of the cap on state and local tax (SALT) deductions enacted in the 2017 Tax Cuts and Jobs Act. Pass-through entities can deduct this tax at the Federal level, thereby allowing partners of partnerships and shareholders of S corporations to receive the benefit of a full deduction for SALT paid before income is passed-through to them. A credit will be allowed against regular State income tax to offset the new Entity tax. This proposal aligns with similar efforts in Connecticut and enables individuals affected by the SALT cap to use IRS-allowed business deductibility to mitigate its impacts.
So, New York joins more than a dozen states actively considering our SALT Parity reform this year. With the uncertain prospects of federal action, the recent IRS blessing clarifying their position, and the effects of COVID continuing to negatively affect millions of businesses, this is the perfect time for states to take up this reform and help their Main Street businesses.
Main Street Employers and SALT – Issue Brief
Given all the activity on the SALT Parity front, we decided to put together some materials outlining the issue, why it’s important, and the status of our efforts.
The presentation can be accessed by clicking the preview image below:
CA Governor’s Budget Includes SALT Parity
SALT Parity Q&A
Increased interest in our SALT Parity efforts means increased questions about how the reforms work and why it is the right plan to help Main Street employers during an extremely challenging time. Click the link below for the full Q&A:
PMSE Statement on Final Covid Relief Package
Business Community Rallies Against Surprise PPP Tax Hike
Congress is on the cusp of passing a bipartisan assistance package to help the families and employers through the last months of the COVID-19 pandemic. As part of this package, the entire business community and its Hill allies sent a letter supporting expanding and extending the Paycheck Protection Program (PPP) while clarifying congressional intent on the tax treatment of PPP loans.
Getting the tax treatment of PPP loan forgiveness correct would avoid a surprise $120 billion tax hike on the five million employers who took out PPP loans. Those employers were promised tax-free forgiveness when they applied for the loans, and that was what they understood when they spent the loan proceeds keeping their workers employed.
The letter, which was signed by more than 800 trade organizations, can be downloaded by clicking here.
PMSE Statement on Bipartisan Covid Relief Plan
Wall Street Poised for Win on Money-Laundering Bill in Lame-Duck
Wall Street is setting records even as millions of Main Street businesses struggle to stay alive, so what’s Congress doing? Sneaking legislation onto the Defense Authorization Act that makes life easier for big New York City banks by shifting their money laundering responsibilities onto Main Street businesses.
The legislation, authored by Caroline Maloney (D-NY) and Maxine Waters (D-CA), accomplishes this remarkable task in two simple steps: 1) relieve banks of some of their current anti-money laundering responsibilities; and 2) impose onerous new requirements on the struggling Main Street employers. As a result, the struggling restaurant down the street will need to start reporting the owner’s personal information to FinCEN, under penalty of jail time, but their bank, insurance company, accountant, and everybody else in the financial services community will be exempt.
Here are the key paragraphs from yesterday’s Bloomberg account. (Do they have an award for “Year’s Best Headline?”)
“Wall Street Poised for Win on Money-Laundering Bill in Lame-Duck”
Wall Street is on the verge of a long-sought lobbying win to relax anti-money laundering requirements, as Congress moves to wrap up its work for the year.
The measure, tucked into a must-pass Defense Department spending bill, could dramatically lighten lenders’ compliance burdens by creating a business-owner database to keep illicit cash out of the financial system and bar use of anonymous shell companies to launder money. Lawmakers released a final version of the legislation on Thursday, which still needs a vote in the House and Senate before it can be signed into law by President Donald Trump….
The money-laundering changes have long been a focus of banks, which are held responsible for reporting suspicious transactions and ensuring customers’ identities — duties considered vital in pursuing financial crimes. The industry has argued that the bill will modernize law enforcement’s ability to get useful information while also simplifying banks’ costly compliance demands….
The changes banks want won’t come without a cost — namely to small businesses’ compliance efforts. The Congressional Budget Office estimated that the bill would generate substantial expense by requiring as many as 30 million new filings a year to the Treasury Department’s Financial Crimes Enforcement Network, which would track companies’ ownership in a confidential registry. Negotiations over the legislation have since sought to make the new system more palatable to small businesses, according to people familiar with the talks.
“If it only applied to shell companies, we wouldn’t probably have as many objections,” said Kevin Kuhlman, who has lobbied for the National Federation of Independent Business against the bill, which requires firms with small numbers of employees to submit accurate ownership information.
Kuhlman said there is also concern among small businesses over the security of information that would be provided by companies for the new database. FinCEN, which would host the new registry, was caught up in a massive leak of banks’ secret disclosures that revealed trillions of dollars in suspicious bank transactions. News reports based on the documents fueled a new round of criticism that global financial firms have enabled large-scale money laundering under current rules.
You can read the full Bloomberg story here.
The broader business community has been fighting this ill-advised effort for years, but their backs are against the wall now. The House is expected to take up the Defense Authorization Act early next week.
But it’s not over either. President Trump has promised to veto the bill over several unrelated issues and its questionable whether the House or Senate have the votes to override the expected veto. Its safe to say the more Representatives and Senators read this Bloomberg piece, the fewer votes they’ll get. The congressional “Pro-Money Laundering, Anti-Main Street Caucus” is not very popular, after all.