By: NECA CEO John M. Grau
After many years of discussion, education, and activism by NECA, Congress at long last passed a comprehensive tax reform bill that we believe will help reduce your tax burden and help grow the electrical construction industry for the foreseeable future. When Congress began to pull together its first take on reform many months ago, it quickly became unclear whether this was going to be truly beneficial for our industry.
We were extraordinarily concerned that after years of calling for tax rate parity for all our members, no matter how they are organized, Congress was not hearing the message. There were additional concerns such as how overall tax rates, the estate tax and the alternative minimum tax would be handled. The proposed elimination of several infrastructure financing mechanisms, including Private Activity Bonds and the Historic Tax Credit, was troubling. Lastly, we also hoped that several other items such as repeal of the Cadillac Tax, approval of composite plans, and whether long-standing energy tax extenders would be made permanent.
While we did not get every single item we desired, NECA worked tirelessly to advocate for a substantially better final bill than originally presented. Our multifaceted advocacy efforts included classic boots on the ground lobbying, extensive coordination with our coalition partners, engagement with our chapters, receipt of feedback from our members on how the varying proposals would affect their bottom line, and the hundreds of letters sent by all of you to Capitol Hill through our Legislative Action Center.
Thanks to all these efforts, we cultivated multiple champions in Congress who helped secure NECA contractors several major wins: a lower corporate rate of 21 percent (down from 35 percent); a 15 point reduction for our members organized as pass-through businesses, with inclusion of this lower rate for all pass-through firms organized as trusts; lower individual rates for all our members and their employees; and, a doubling of the estate and gift tax exemption to $11 million per spouse. (Click here to see our overview of the Tax Cut and Jobs Act.)
Looking forward, we view this as an opportunity to build on future successes in the coming year. Last year’s missed opportunities by Congress will be viewed as new opportunities in 2018. We will work with our allies to make needed improvements to the new tax law. Our advocacy efforts remain committed to enactment of a significant infrastructure package; repeal of the punitive Cadillac Tax; modernizing the multiemployer pension system; and, addressing our workforce needs for today and for the future.