Build Back Better Down, Not Out

Posted on:

April 14, 2022

In December, Senator Joe Manchin (D-WV) dealt a major blow to President Biden’s agenda when he announced that he would not support the multi-trillion dollar ‘Build Back Better’ (BBB) spending and tax plan, which would create numerous programs—mostly related to climate change and social policy—and would also target small and independent businesses in order to pay for them. Some of the tax changes under consideration include the following: raising the tax rate on S-corporations (opposed to typically larger and/or publicly traded C-corporations), eliminating the stepped-up basis, taxing unrealized capital gains, taxing unrealized capital gains at death, cutting the current unified estate and gift exemptions in half to pre-2017 tax cut levels, and eliminating small business valuation discounts in Section 2704 of the tax code.

This bill, in its current form, would raise the cost of doing business for contractors, which would then likely be passed down to consumers. This all comes at a time when rising inflation, supply chain disruptions, and labor shortages are already affecting small businesses across the country. For these reasons, ACCA urged Congress against inflationary spending and tax increases for small businesses. Our message came amid a historic CPI report in January that indicated 7 percent year over year inflation (the highest in 40 years).

While BBB has faced significant setbacks, it is not dead yet. President Biden signaled support for breaking up the massive bill and moving smaller portions of it on separate tracks. The idea behind this is that they might be able to get at least some of it passed into law even if the broader bill has no chance of passing. This presents a silver lining for contractors. Part of BBB included extension and expansion of major energy efficiency tax incentives including the 179D commercial deduction, 25C residential credit, and 45L credit for developers and new construction. It’s also worth noting that 25C and 45L expired at the end of 2021. 179D was made permanent at the end of 2020 thanks in part to ACCA’s efforts. ACCA and its members have urged Congress to both extend and expand these measures separately from the broader BBB bill.

At the time of writing, no portion of BBB has been passed into law, and it is not yet clear what, if any, parts will pass. ACCA will continue to engage Congress regarding this legislation and keep members up to date on any notable developments.

Supreme Court Blocks OSHA Employer Vaccine Mandate

On January 13 the Supreme Court blocked President Biden’s vaccine or weekly testing mandate for employers with 100 or more employees in a 6-3 ruling. The mandate required that workers at companies with 100 or more employees must get vaccinated or submit a negative COVID-19 test weekly to enter the workplace. It also required unvaccinated workers to wear masks indoors at work and would have affected an estimated 80 million Americans. The court did allow a vaccine mandate covering Centers for Medicare & Medicaid Services (CMS) workers to go into effect.

The deciding justices stated in an unsigned opinion on the large employer mandate: “OSHA has never before imposed such a mandate. Nor has Congress. Indeed, although Congress has enacted significant legislation addressing the COVID–19 pandemic, it has declined to enact any measure similar to what OSHA has promulgated here.” 

ACCA will continue to keep members up to date regarding COVID-19 rules and regulations. 

Join ACCA for a Town Hall Event at ACCA 2022 Conference and Expo

All ACCA members are invited to join our government relations team and ACHR NEWS’ Kyle Gargaro for a town hall meeting on Tuesday, March 29 at 12:00pm CT during the General Session of ACCA 2022 Conference and Expo. You’ll have the opportunity to give ACCA direct input on the issues that affect your business most and to learn about what ACCA has been working on and how it impacts you. Having direct input from contractors helps us understand what issues are affecting you and your business on a day-to-day basis and allows us to represent your interests in Washington more effectively. We hope to see you there!