New Hampshire
Small business owners ask U.S. House tax writers to extend Trump-era deductions • New Hampshire Bulletin
WASHINGTON – As Congress gears up for negotiations ahead of the 2017 tax law’s expiration, economists and small-business owners urged U.S. lawmakers Thursday to extend or make permanent the Trump-era tax cuts.
Business owners from West Virginia and Wisconsin testified at a hearing before members of the House Committee on Ways and Means, advocating for the continuation of deductions that they say allowed them to reinvest in their operations.
The Tax Cuts and Jobs Act of 2017, which expires at the end of 2025, allowed some business owners to deduct up to 20 percent of qualified business income. The bill also temporarily cut taxes on new equipment purchases and other qualified assets, but those incentives are phasing out.
For individuals, the TCJA temporarily lowered marginal tax rates across most income levels and expanded the standard deduction and child tax credit, among other changes.
Large corporations saw the top corporate tax rate permanently drop to 21 percent from 35 percent.
“Seven years ago, Republicans passed the Tax Cuts and Jobs Act under President Trump, delivering relief to millions of families and small businesses and creating the best economy in our lifetime,” Committee Chair Jason Smith, a Missouri Republican, said during his opening remarks.
“Here’s the bottom line: Congress must act soon to prevent what will be the largest tax hike in history on workers, families, farmers, and small businesses,” he later added.
Democrats on the committee slammed the bill as a “corporate tax giveaway.”
“We knew that their tax scam would disproportionately benefit the wealthy and well-connected. We knew that it wouldn’t pay for itself. We knew that big corporations, not their workers, would feel the most benefit,” said the committee’s ranking member, Richard Neal of Massachusetts.
The Democratic-invited witness, Kathryn Anne Edwards, a labor economist at the RAND Corporation, said “unless the intention of the 2017 tax law was to directly transfer income to the richest Americans at incredible expense to ordinary Americans, it was a failure.”
Extending the law could cost the government between $3.3 trillion and $3.6 trillion over the next 10 years, Edwards told the panel, citing estimates from the Committee for a Responsible Federal Budget and the Tax Policy Center.
A ‘landmark’ change
But small business owners say the law has been a financial lifeline.
Michael Ervin, founder of Coal River Coffee Company in St. Albans, West Virginia, told the panel that his five-year-old business has benefited from the 2017 tax code changes, particularly the temporary income deductions for sole proprietorships, partnerships, and S-corporations.
“After the passage of the Tax Cuts and Jobs Act, LLCs, and other pass-through businesses like mine were able to benefit from the newly minted Small Business Deduction, also known as the 199(a) deduction. This provision has allowed me to deduct up to 20 percent of my business income, which has let me invest in my business, my employees, and my community,” said Ervin, who employs roughly a dozen people.
If Congress does not extend the special deduction or make it permanent, Ervin told lawmakers that he will face a “significant tax hike” and be at a disadvantage compared to nearby large businesses.
“Down the street from my location is a larger competitor, Tim Hortons. In two years, if my taxes go up, the corporate rate will remain 21 percent. Tim Hortons will be paying a 21 percent federal rate and a 6.5 percent state corporate rate for a total combined rate of 27.5 percent, while my total combined rate will be closer to 45 percent. This disparity will make it extremely difficult for me to compete,” Ervin told lawmakers.
Austin Ramirez, president and CEO of the Wisconsin-based Husco International Inc., also told the panel that the pass-through deduction has “leveled our playing field with our peers organized as corporations.”
Husco, a privately held family-owned manufacturer of hydraulic and electromechanical parts for vehicles, employs about 1,600.
Ramirez said the TCJA enabled his business to do the “most significant renovation of our Waukesha, Wisconsin, headquarters in 70 years.”
The company has invested $50 million to renovate its office space and shop floor, allowing the addition of nearly $150 million to its top line since 2017, Ramirez said.
Temporarily extending Trump tax cuts
Going forward, Smith said, congressional tax writers should note that the law “provided a critical blueprint that Congress can build upon to make lasting improvements to our tax code.”
“The House has already shown strong bipartisan support for key provisions of the 2017 law by passing the Tax Relief for American Families and Workers Act earlier this year. But there is still much work to be done,” he said, referencing a bill he sponsored and negotiated with Democratic Sen. Ron Wyden of Oregon.
The hearing happened against the backdrop of stalled negotiations in the U.S. Senate on the act referred to by Smith, a short-term tax bill that garnered rare widespread bipartisan support in the House in January.
The bill, which would temporarily revive expired or expiring business tax breaks and expand the child tax credit, passed on a 357-70 vote.
While House Republicans overwhelmingly supported the legislation, GOP senators oppose provisions of the bill that would temporarily expand the refundable portion of the child tax credit and allow households to calculate the credit based on their previous year’s earnings, if higher than the current year’s.
Business owners at a February hearing before the Senate Committee on Finance implored the upper chamber to pass the bill.
Ramirez, the Waukesha business owner, also expressed on Thursday to the committee his support for the Tax Relief for American Families and Workers Act, which would revive an expired 2017 incentive for businesses that allowed them to immediately write off research and development expenses.
“Husco’s inability to expense these costs since 2022 has cost us more than $20 million in liquidity, wiping out a large portion of the TCJA benefits and creating a disincentive to invest in innovation,” Ramirez testified.
Other temporary measures enacted under the TCJA expire on Dec. 31, 2025.
New Hampshire
City Of Concord Library: Christmas Eve Early Closure
The library will be closing early on Tuesday, December 24, at 12pm. We will be closed Wednesday, December 25th, and will resume of normal hours on Thursday, December 26th. The CPL wishes you a happy holiday!
This press release was produced by the City of Concord. The views expressed here are the author’s own.
New Hampshire
Hypothermic hiker rescued after stranded in waist-deep snow amid wind chills near zero
MOUNT LAFAYETTE, N.H. – A hiker was rescued on Thursday after becoming lost and suffering from hypothermia during a solo hike in central New Hampshire.
Patrick Bittman, 28, of Portland, Maine, had embarked on a hike to see the sunrise from Mount Lafayette on Wednesday night.
Officials said Bittman came upon deep blowing snow near the summit of Little Haystack on Franconia Ridge, forcing him to come back down the mountain.
On his return, however, he became lost and ended up moving into the Dry Brook drainage, where temperatures dropped to around 20 with wind chills near zero.
After spending the night lost on the mountain, Bittman called 911 on Thursday morning. He said that his limbs were frozen, he was experiencing hypothermia and that he was no longer able to move through the snow, which was several feet deep.
HOW TO WATCH FOX WEATHER
Ground crews with the New Hampshire Fish and Game Department and Pemi Valley Search and Rescue Team, along with an aerial crew with the Army National Guard, responded to his call.
However, they faced poor visibility from cloud cover and intermittent snow squalls over the steep terrain and thick vegetation, forcing them to adjust their approach to rescuing Bittman.
The first ground rescuers had to spend an hour bushwhacking 1,000 feet of vegetation off the trail to reach Bittman by early Thursday afternoon. By then, he was found suffering severe hypothermia and was placed in an emergency sleeping bag for shelter and given warm, dry clothes and warm fluids.
Two hours later, weather conditions allowed for the Army National Guard to reach Bittman with a medic. They hoisted the young man into the helicopter and then was flown to a local hospital for treatment.
“This aerial rescue saved a multi-hour carry out thru rugged terrain and is a testament as to how search and rescue works in New Hampshire with several different groups working together for a common goal,” New Hampshire Fish & Game officials said.
New Hampshire
Distant Dome: Christmas Comes for Some in New Hampshire
By GARRY RAYNO, Distant Dome
Christmas in New Hampshire is upside down if you are the Granite State’s government.
New Hampshire lawmakers have decreed that most of the “gifts” from the state do not go to the needy, but to those on the other end of the economic spectrum.
With Republicans again firmly in charge of the legislature and governor’s office, the “mandate” according to House Majority Leader Jason Osborne, R-Auburn, will focus on “lowering taxes, cutting wasteful spending, growing our economy, empowering parents with the Parents Bill of Rights and expanding the wildly successful Education Freedom Account program.”
The question is who benefits the most from “lowering taxes” and “cutting wasteful spending,” and what is “wasteful spending,” services for poor women who go to Planned Parenthood clinics because they cannot afford to go to a private practice physician?
For the better part of a decade now, Republicans have voted to cut the rates of the state’s two business taxes, the business profits tax and the business enterprise tax.
The larger collector, the business profits tax, receives the vast majority of its revenue from multinational corporations not based in New Hampshire, but who do business here.
The business enterprise tax is a value added tax on every business in New Hampshire although many very small businesses are exempt from paying.
Now you might think lowering the rate of the business enterprise tax would benefit local businesses more than cutting the rate of the business profits tax and that would be a no brainer for lawmakers, but no, they lowered the rate for the business profits tax more frequently and far greater than they did the tax rate of the business enterprise tax.
Who did that help more? Large multinational corporations received the bulk of that benefit not your local business owners who do not reach across continents and cultures to soften the blow of taxes.
And in a little over a week, the one state tax that actually taxes wealth will be eliminated although it produced $185 million in revenue last fiscal year. Can you imagine what $185 million would do spread across the university and community college systems to reduce tuition for New Hampshire students?
Who pays the interest and dividends tax? About 90 percent of the revenue comes from the top five percent of wealth holders in the state. That is not most of us or our neighbors.
Well you might say, what about property taxes which every home, building and land owner pays in the state, surely they too should have a lower tax rate.
Have you checked the tax bill you are about to pay in a little over a week? I don’t know about your tax bill, but mine had a hefty increase this year, and I suspect yours did too.
And with the state facing a budget crisis not seen in two decades, you are likely to see it go up even more after the lawmakers are finished crafting the next two-year budget this spring as more state costs are likely to be downshifted to local property tax payers as they were two decades ago when the state stopped paying its share of the retirement system costs for municipal, school and county workers as they had since the unified system was created during the last century.
That sifted tens of millions of costs to local property taxes that the state once paid.
There are two Christmas presents the majority of local property taxpayers sort of received in the last year, two superior court decisions declaring the state’s education funding system unconstitutional, inequitable and too meager to cover the cost of an adequate education, which is every child’s fundamental, constitutional right.
Those two decisions in the ConVal and Rand cases — if acted on by lawmakers — could have lowered the property taxes of the poorer communities hit hardest by the state’s education funding system like Claremont, Berlin, Franklin, Newport, Pittsfield and others.
But that change would increase the property taxes in communities with the lowest rates in the state with the greatest property wealth, so in New Hampshire’s upside down Christmas world, lawmakers did not take the bait and instead did nothing keeping the current system in place.
We don’t want the taxpayers in those property wealthy communities saying “Bah Humbug” this time of year lawmakers might as well have said.
Elementary and secondary education is not the only place New Hampshire lawmakers traditionally shortchange the poorer residents, they do so in post-secondary education as well with tuition costs that are second only to Vermont for in-state students in the country.
Is it any wonder New Hampshire students have the highest debt load of any in the country when they graduate from college?
While the university and community college systems have held tuition costs near steady for in-state students for the last few years, they cannot do that forever with shrinking enrollments, reduced programs and fewer full-time faculty members.
There is a Christmas flavored program that began four years ago, the Education Freedom Account program that was sold by Education Commissioner Frank Edelblut and others as an alternative for poor families whose children have trouble in the public school environment.
However 70 to 75 percent of the students were not in public schools when they joined the program, they were in private or religious schools or homeschooled.
In other words, parents already sending their children to private or religious schools or homeschooling have been able to gain a state taxpayer-funded subsidy to cover the costs the parents were paying.
The program is currently capped at 350 percent of poverty, which is a salary of $71,540 for a family of two and $109,200 for a family of four.
The legislature defeated an attempt to raise the rate higher last session to 425 percent of poverty level, or up to $133,600 annually for a family of four and $86,870 for a two-member family.
The federal government estimates the median income in New Hampshire for a family of four is $133,447.
One bill in the upcoming session would do away with any income cap which would allow anyone with school-age children to apply for a grant of about $5,200 per student, a provision that is bankrupting Arizona, North Carolina and several other states with no cap.
But the program has gifted many religious and small private schools struggling to survive with a great deal of state money, money that once was forbidden for religious schools.
And another beneficiary of the program, the single biggest vendor for the parents using state money, is Amazon.
Does Jeff Bozos really need any more of your state tax dollars? I doubt it, especially at Christmas time.
Merry Christmas and to all a good night.
Garry Rayno may be reached at garry.rayno@yahoo.com.
Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London
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