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“In the Know”
FEI’s Private Company Roundtable Email Update
October 5, 2010
And they’re off… Congress officially adjourned early Thursday morning in order to have as much time as possible to campaign ahead of what are still shaping up to be historic midterm elections. As the dust settles, it has become clear that many key proposals important to private companies have been left unresolved including the estate tax, the expiration of the Bush era tax cuts, and the retroactive extension of the research and development tax credit. The 111th Congress has been given some of the lowest approval ratings in America’s history, and will certainly not win any supporters for having left town with so many loose ends remaining.
The Private Company Roundtable held its second teleconference on Wednesday, September 29th, with nearly 100 members participating, and had some lively dialogue on the upcoming election. While a certain amount of partisan expression is to be expected from policy speakers, as the Roundtable continues, we will work to provide speakers from both sides of the political aisle as well as the Administration and federal agencies, so that all viewpoints are represented. FEI continues to strive to offer speakers and content that are of interest to our diverse membership. The Roundtable was formed to offer its membership a voice on the national stage and FEI is committed to working with all facets of government.
If you have specific ideas for speakers or issues, we are open to suggestions for future calls. Much like the FEI membership as a whole, the Private Company Roundtable is a melting pot of companies, political beliefs, and interests. The group does stand united, however, in striving to address issues important to private companies at the national level.
As mentioned, we are looking for volunteers to serve on the Leadership Advisory Council to help recruit new members to the Roundtable as well as assisting in developing future programming. Please let Tyler Roberts know if that is something you’re interested in learning more about. We look forward to working with each and every one of you on future calls and initiatives.
Sincerely,
Tim Anglim
Co-Chair, Private Company Roundtable
Don Robillard
Co-Chair, Private Company Roundtable
Roundtable Recap:
On the September 29th call, the Roundtable heard a lively discussion from Congresswoman Lynn Jenkins of Kansas and Steven Moore, Chief of Staff for Congressman Peter Roskam of Illinois. Jenkins, a former CPA and state treasurer, discussed her work on the House Financial Services Committee, the key committee in the House of Representatives that was responsible for drafting the Dodd-Frank financial regulatory reform bill that was passed earlier this summer. Jenkins highlighted that this is the first time since 1974 that Congress failed to pass any type of budget. Jenkins made it clear that it does not matter if you are Republican or Democrat – both parties have been responsible for the unsustainable spending that is mounting a massive debt that will be passed along to our children and grandchildren.
Steven Moore discussed the importance of a group like the Private Company Roundtable and the need for getting the message of FEI and private companies before members of Congress. He explained to the group how the political process works and explained the most effective way to get FEI’s message to elected leaders. After the discussion, both Jenkins and Moore took questions from the audience.
Before our speakers, Roundtable members were able to hear about the recent work of FEI’s two private company committees. Mark Smetana, chair of the Committee on Private Company Policy and Daryl Buck, chair of the Committee on Private Company Standards spoke about committee initiatives and meetings.
Issue Analysis: The Small Business Jobs Act
On September 27th, President Barack Obama signed into law the Small Business Jobs Act. The Act is aimed at growing America’s small businesses and assisting in their ability to hire new workers as the nation continues to struggle with an unemployment rate hovering near 10 percent. Considered a pillar of America’s continued economic strength, many small businesses will benefit from the provisions included in the Small Business Jobs Act.
The Act makes available $30 billion in loans and $12 billion in tax incentives. Provisions in the bill that benefit small businesses include:
- Extension of 50 percent bonus depreciation for equipment that goes into service in 2010 for all businesses.
- Enhancement to federal programs that support very small businesses. These provisions include expansion of SBA loans for certain small businesses, and the creation of the Small Business Lending Fund, which transfers $30 billion from TARP into a fund specifically for small businesses.
- Built-in gains (BIG) tax relief for S corporations– reduces the holding period of BIG assets to five years. The American Recovery and Reinvestment Act of 2009 had reduced the recognition period to 7 years in 2009 and 2010, which was down from the previous 10 year recognition period. Due to the limited application, this provision is only applicable to those S corporations that made the conversion prior to January 1, 2006.
- Section 179 expensing through 2011. This provision increases the maximum amount that may be expensed under IRC Section 179 to $500,000 and increases the phase-out threshold amount to $2 million. Some businesses, particularly those that made real estate improvements, will be eligible for benefits for which they were not previously eligible. The Act temporarily expands the application of Section 179 to certain real property up to $250,000 examples of eligible property includes: qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property.
- Five-year carryback of general business credit for eligible small businesses with less than $50 million in revenue. This provision provides businesses with a break on taxes for this year, as well as allowing the credits to offset the Alternative Minimum Tax.
Historically, small businesses are responsible for creating roughly 65 percent of the new jobs in the United States. This Act is intended to enable small businesses to begin the hiring of new workers.
While the bill offers small businesses much needed footing in these troubling economic times, it did not address the onerous Form 1099 requirements for reporting business transactions of $600 or more enacted in the health-care bill. Many Republicans and Democrats were pushing to have the requirement repealed in the bill; however they would have had to find $17 billion in revenue offsets that would be required with its repeal. It continues to be a very burdensome requirement for America’s companies.
Members of FEI’s Committee on Private Company Policy had been advocating for passage of several of the provisions in the Small Business Jobs Act over the last year. Its passage by both Chambers of Congress and a signature by President Obama is a huge success for not just the Committee on Private Company Policy, but for many of FEI’s private company members who will be able to take advantage of the tax relief this year. The Private Company Roundtable can take this as an example on how FEI members can assist in influencing a national debate on issues affecting private companies.
Upcoming Events/Roundtable News:
FEI is seeking interested Roundtable members who might be interested in serving on the Leadership Advisory Council, a body that will support the Co-Chairs in furthering member recruitment and the planning of future calls and programming. If you are interested, please contact Tyler Roberts, Policy Analyst, at troberts@financialexecutives.org or 202.626.7807.
Please mark your calendars for the next two Roundtable teleconferences.
· Wednesday, January 12, 2011
· Wednesday, April 20, 2011
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