Making Tax Deductions Permanent Will Expand Economic Growth, Says ABC
According to Associated Builders and Contractors, the U.S. construction industry is still benefiting from the Tax Cuts and Jobs Act, which has helped small business owners grow their companies and workforce since its passage in December 2017. On Tax Day, ABC called on Congress to make the individual and pass-through small business deductions permanent—currently scheduled to sunset in 2025—and repeal the alternative minimum tax and the estate tax.
“Tax reform has given ABC members—most of which employ fewer than 100 people—the certainty necessary to expand and upskill their workforce, buy new equipment and develop their businesses,” said Michael Bellaman, president and chief executive officer of ABC. “That said, furthering these reforms will continue to level the playing field for the construction industry, which has historically paid the highest effective tax rate, spur job creation across the United States and promote prosperity and growth for the American worker.”
As a result of initial tax reform savings, ABC members reported they were able to make capital investments, invest in workforce development opportunities, provide raises and bonuses for current staff and hire more employees, according to a June 2018 survey of the ABC board of directors.
For the 116th Congress, ABC supports additional tax reform measures to increase tax rate fairness, protect family businesses, support retirement savings and expand 529 education plans, including:
· Fully repealing the estate tax by passing the Death Tax Repeal Act (S. 215/H.R. 218), introduced by Sen. Thune (R-S.D.) and Rep. Jason Smith (R-Mo.). This common-sense legislation will help family-owned American businesses keep and create jobs, grow the economy and relieve families of an unreasonable financial burden.
· Making the TCJA’s tax deduction for qualified business income permanent by passing the Main Street Tax Certainty Act (H.R. 216), also introduced by Rep. Smith.
· Fully eliminating the AMT. While the TCJA eliminated the corporate AMT, the code was only softened for individuals by increasing the exemptions by nearly a third, while retaining the complexity of requiring tax payers to calculate their AMT liability.
· Allowing increased retirement contributions, incentivizing employers to boost 401(k) participation and modernizing the tax code to support retirement savings for hardworking Americans.
· Expanding 529 education plans to include industry-recognized apprenticeship programs, which would help address the construction workforce shortage currently impacting the United States. The construction industry added 307,000 new jobs in 2018, a year-over-year increase of 4.3%. Average hourly wages also expanded to more than $30 for the first time on record in August 2018—10 percent higher than the average wage increase for other U.S. nonfarm private sector jobs for that month—and a more than 3 percent increase compared to August 2017. ABC member contractors invested more than $1.6 billion in workforce development in 2018.
