Apply by Wednesday, October 20, 2021!
On Sept. 13, House Democrats released legislative text detailing significant tax increases to pay for their upwards of $3.5 trillion human infrastructure bill. Those tax increases include but are not limited to: (1) increasing the top rate to 26.5% from 21% for corporations with incomes of $5 million; (2) creating a new 3% surtax on individuals/pass-through businesses with modified adjusted gross income exceeding $5 million; (3) increasing the top tax rate for pass-through businesses to 46.4 percent (39.6 percent top individual tax bracket + 3.8 percent net investment income tax (NIIT) + 3 percent surtax); (4) increasing the top capital gains rate to 31.8 percent (25 percent statutory rate + 3.8 percent NIIT + 3 percent surtax); and (5) capping the maximum Section 199A qualified business income deduction for high income individuals. The proposal also includes registered apprenticeship requirements, among other things, for entities to receive certain construction development tax incentives largely used in private construction markets. AGC opposes these proposals and will fight their enactment, as they would hinder economic recovery and growth.
On September 9, the House Committee on Ways and Means, which has jurisdiction over tax policy, began consideration of its share of President Biden’s American Families Plan. The final price tag of the overall legislation is still being negotiated by the House and Senate, as moderate Democrats, such as Senator Joe Manchin of West Virginia, are seeking to scale back the size and scope of the legislation. This will have significant bearing on how large the overall package of tax increases will be that the Ways and Means Committee will consider.
Negotiations Underway to Determine What is Actually Included in the Bill
On Aug. 10, the Senate passed, 69-30, the Infrastructure Investment and Jobs Act, a historic, $1.2 trillion infrastructure package investing in all components of the nation’s physical infrastructure. AGC endorsed this legislation because it reauthorizes the nation’s federal-aid highway and transit programs for five years at record funding levels, includes significant environmental permitting streamlining provisions, and provides a host of other investments for a wide array construction projects without raising taxes on construction firms and without including any new, significant workforce mandates, like the PRO Act or government-mandated project labor agreements. A full AGC analysis of the bill can be found here. Additionally, a breakdown of what’s in the bill for each construction market can be found here:Highway Contractors; Utility Contractors; Direct Federal Contractors; Building Contractors ; and Other Markets (Transit, Rail, Waterways, Airports).
This week the Senate is debating the Infrastructure Investment and Jobs Act, or commonly referred to as the bipartisan infrastructure bill. AGC has weighed in on a few of the amendments that have been offered and is monitoring to see if they will get a vote:
On July 28, the Senate agreed, 67-32, to begin debate on a $1.2 trillion bipartisan infrastructure package. Ahead of the vote, the bipartisan group of senators announced it had resolved all major issues on the package. As a result of this initial vote, the Senate will consider the package over the coming days and, perhaps, weeks. However, an actual legislative bill detailing what is in the package has yet-to-be released or formally introduced as of July 29. When a bill is introduced in the Senate and, if passed, the bill will head to the House of Representatives for consideration. A 57-page summary of the bipartisan infrastructure package notes how it includes funding for a host of traditional, physical infrastructure. AGC appreciates and has fought for the significant levels of investment in the package and awaits actual legislative text before considering a formal association endorsement.
On June 22, AGC along with over 100 other trade associations voiced their strong opposition to any attempts to roll back the 20 percent deduction for pass through businesses—S-corps, partnerships, limited liability companies—enacted in the Trump tax cuts under Section 199A of the federal tax code. Despite the opposition, Chairman Ron Wyden announced on July 20 that he would move forward with a bill to phase out Section 199A. AGC will oppose this bill that will increase taxes on small business construction companies.
The U.S. Department of Labor has announced a Notice of Proposed Rulemaking to establish standards and procedures to implement and enforce Executive Order 14026, “Increasing the Minimum Wage for Federal Contractors,” signed by President Biden on April 27, 2021.
On July 16, AGC submitted regulatory comments on the U.S. Treasury Department's interim final rule governing how state, local, territorial and Tribal governments can spend $350 billion from a COVID-relief fund established under President Biden's $1.9 trillion COVID-19 relief law: the American Rescue Plan Act. AGC’s regulatory comments urge the Department to, among other things: (1) confirm and expand eligibility for all forms of infrastructure and building construction investments and related revenue streams; and (2) drop any reporting requirements encouraging government-mandated project labor agreements, local hiring requirements and the expansion of prevailing wage laws beyond the status quo. And, in a victory for AGC and the construction industry, the Department provided new guidance clarifying that losses of revenues from gas taxes and vehicle licensing fees incurred during the COVID-19 pandemic are eligible to be replenished using these recovery funds. AGC will continue to monitor the distribution of these recovery funds.