Senate report predicts small businesses will spend more on accountants after tax law

A new report from Sen. Ron Wyden, D-Ore., the ranking Democrat on the Senate Finance Committee, discusses how small businesses will face more uncertainty and complexity from the Republican tax law and will ultimately need help from their accountants to figure out the pass-through deduction.

The report, “Tax Code and Small Business: Even More Bizarre and More Unfair than Before,” predicts small business owners will be spending more money on tax professionals than on growing their operations. The pass-through provisions of the bill provide a 20 percent deduction to businesses, but only up to a certain income level for certain types of professional service providers, such as accountants, lawyers and doctors. The deduction starts to phase out when the net income of one of the owners reaches $157,500, or $315,000 for joint filers, and it ends entirely once income reaches $207,500, or $415,000 for joint filers.

“Republicans claim to want less government intervention, but with their new tax law they picked winners and losers—architects are in, accountants are out; engineers made the cut, doctors did not—leaving business owners wondering whether or not they were blacklisted,” said Wyden. “What good is a deduction if money spent in annual fees to your accountant far exceed the tax break? Main Street job creators will be lucky if they figure out how to calculate their deduction any time soon.”

The report notes that the text of the pass-through deduction spans nine pages, cross-references more than 20 other sections of the tax code, and directs the Treasury Department to issue volumes of new regulations. It also cites a recent letter from the AICPA asking for more guidance about the provision: “And if there is any question whether the new law and regulations will add additional burden to small business owners, just look to the 19-page letter sent by the American Institute of Certified Public Accountants highlighting issues that require ‘immediate guidance’ for taxpayers to be able to simply ‘comply with their 2018 tax obligations."

Wyden’s report quoted the founder of an IT consulting business in Washington D.C., who has been telling his colleagues and friends in the small business community to “speak to their accountants because there is no way to make any sense of how the law will impact folks.”

Wyden pointed to a separate recent report from Businesses for Responsible Tax Reform that found a majority of small business owners don’t believe the tax law will help grow their business. When asked if they would hire a new employee as a result of the new tax law, 69 percent of the business owners polled said they would not, while only 25 percent said they would. When asked if they would be giving their employees raises due to the new tax law, 59 percent said no, while 31 percent responded that they would. The poll found that 54 percent of small business owners said the tax law favors large corporations over small businesses (40 percent disagree), and 50 percent believe the wealthy and corporations will benefit most from the tax law, while only 20 percent believe the middle class and small businesses will benefit. In addition, 55 percent of respondents don’t believe the tax law puts small businesses on a level playing field with big businesses, with only 31 percent believing it does.

The poll surveyed 385 small business owners in the election battleground states of Arizona, Tennessee, Maine and Nevada, and skewed more Republican than Democratic, with 41 percent of respondents identifying as Republican, 31 percent as Democrat and 28 percent as independent or other.

The majority of respondents opposed the fact that the corporate tax cuts were made permanent while cuts for pass-through businesses were on temporary, with 58 percent saying they oppose eventually ending tax cuts for pass-throughs like S-corps, LLCs and proprietorships in 2025 while making corporate tax cuts permanent, while only 34 percent saying they support it. That response was understandable, as 86 percent of the respondents identified as being pass-through businesses such as S corporation, LLCs, sole proprietorships or partnership, while only 5 percent of the respondents said their business was organized as a C corporation.

Surging small-business sentiment closes

The numbers: The index of small-business optimism from the National Federation of Independent Businesses rose 0.7 point in February to a reading of 107.6, the second-highest reading in its history.

What happened: The index of sentiment among small-business owners has been on a tear ever since tax cuts were enacted. The headline number was stronger than the 107.1 reading forecast by economists surveyed by Econoday, and puts the index within a hair of its all-time record, set in 1983.

“The small business sector is very encouraged by the economic policies of the administration and the strength of the economy, willing to invest more and hire more if workers can be found to fill their open positions,” the lobby group said in a release.

Big picture: In February, only one of ten index components declined, and three were unchanged.

For the first time since 2006, taxes received the fewest votes as owners’ #1 business problem, NFIB said. In contrast, the lack of qualified workers was respondents’ biggest problem.

Reports of improved earnings trends were the highest since 1987, inventory investment was the strongest since 2000, and capital outlays were the highest since 2004.

“Small business owners are telling us loud and clear that they’re optimistic, ready to hire, and prepared to raise wages – it’s one of the strongest readings I’ve seen in the 45-year history of the Index,” said NFIB Chief Economist Bill Dunkelberg. “Small businesses are flourishing in a way we haven’t seen in over a decade.”

But as previously reported, some economists doubt that the recent uptick in sentiment will translate into much of a GDP boost, since small businesses have been hiring and spending on capital more than the dour sentiment readings from the industry group would suggest.

Cooperation leads to success in the Bennington shires

Ask Bill Colvin about the state of Bennington County's economy and he'll tell you, "There's definitely signs of improvement." Colvin, of the Bennington County Regional Commission, ticks off a list that includes downtown Bennington's Putnam Block Project, a stable manufacturing base and improved regional cooperation. The $54 million Putnam Block project will reshape the downtown, adding not only retail and commercial space but also housing with new construction.

A common theme voiced by Colvin and others is the new-found sense of cooperation among business and civic leaders.

In May, 130 people attended the first Southern Vermont Economic Development Summit in Brattleboro to brain storm on issues common to both Bennington and Windham counties - the two southern most counties in the state.

"There's a tremendous amount of excitement about doing regional economic development work around Bennington County … and partnering with Windham County," said Colvin, the commission's assistant director and community development program coordinator.

He said the state has given preliminary approval for a planning grant to devise a CEDS - a comprehensive economic development strategy.

Colvin said final approval is expected shortly with a formal launch of the project in October.

He said efforts are also underway to extend and improve cooperation between the northern and southern parts of the county.

Colvin said despite the proximity cooperation between the north and south shires "haven't always been a finely oiled machine, if you will."

One example of the new cooperative effort between the shires is the formation of a workforce in education committee chapter in Manchester.

Colvin's positive assessment is seconded by Wayne Granquist, chairman of the Southern Vermont Economic Development Zone, which comprises both Bennington and Windham counties.

Compared to three or four years ago, Granquist said there's a greater appreciation today for economic development in southern Vermont than there was before Vermont Yankee closed.

"There's a lot of work going on that's laying the foundation for that kind of growth," he said. "I don't think we've seen it yet but it's encouraging to see what is happening."

Granquist said there's no better example of a community coming together then the Putnam Block Project, which is being lead by local businesses and institutions.

"That's really important for downtown and the Select Board just approved the tax increment financing district," he said.

But Granquist also said there are other challenges that must be met.

As the second oldest state in the country next to Maine, he said Vermont has to find a way to keep and attract workers and their families.

He said that's especially true in a rural area where it's hard to attract millennials who want access to high-speed broadband while living in a place where there are lots of activities close by.

Colvin said the Putnam Block project can help build the type of infrastructure that can go a long way in attracting people to the area and also provide badly needed housing.

Industry

Manufacturing has had its up and downs in the county but Colvin said the outlook is positive.

"We helped to pull down one of the largest training grants in Vermont training program history for NSK," Colvin said, referring to the company that makes bearings for a variety of industries.

The $208,000 grant will help cross-train NSK's 325 workers in what Colvin said are advanced manufacturing processes.

He said in the last few years lower level jobs have been lost to the NSK plant in Tennessee. While the grant may not lead to new jobs, he said it does at a minimum secure the existing higher level jobs.

Vermont Composites is also doing well, according to Colvin. He said the company, part of the Kaman Composites group, is building an addition onto its Performance Drive building. He said the addition was made necessary when the company won a contract for a new product line.

Although the company hasn't said it would hire more workers, Colvin said "new line, new addition suggests new jobs."

In the north shire of the county, Colvin said business is humming along at Mack Molding in Arlington.

Perhaps the most pressing problem for companies is finding workers, which Colvin said is an ongoing statewide problem.

Mack Molding is the county's largest manufacturer with 560 employees in Vermont (and another 600 at its locations in North and South Carolina).

"Business is really, really good," said Jeffrey Somple, president of the plastic injection molding and contract manufacturer. "We've probably got more new products under development right now than in the last 10 years."

...

A new era of cooperation for Central Asia

Central Asia is a dynamic and fast-changing region. Over the past couple of decades, it has shown that increased regional cooperation is indispensable to achieving development goals.

The Central Asia Regional Economic Cooperation program started operations in 2001 and has made significant contributions to the region's growth. The program has grown steadily to 11 member countries and has financed more than $30 billion of investments to enhance transport and energy linkages and boost cross-border trade. Over a third of this amount, or $10.5 billion, has come from the Asian Development Bank, which has supported CAREC since its inception.

Despite their rapid development, countries in the region face significant challenges. The spillover impacts of global economic and financial crisis and of lower oil and gas prices have been acute. Climate change is a major global and regional challenge. These issues do not respect borders and underscore the value of working together to navigate the shifting development landscape.

The CAREC program needs a scaled-up mandate to become more effective and relevant in the years ahead.

Its CAREC 2030 strategy, unanimously adopted on Oct 27 by member countries in Dushanbe, Tajikistan, shows the region is ready to fully achieve its enormous potential by connecting its people, policies, and projects. I see four key ways in which it can create the conditions for future growth, stability, and prosperity.

Firstly, it will deepen support for traditional areas of cooperation, such as transport, energy, and trade facilitation. Regional cooperation cannot be achieved without the basic building blocks of good roads and railways, reliable power supplies, and the ability of businesses to seek new markets.

Infrastructure investments that integrate new technologies, coupled with appropriate regulatory reforms, will help accelerate the region's integration with global value chains and support the adoption of clean and renewable energy.

Secondly, there is a pressing need for macroeconomic policy dialogue among member countries to promote economic and financial stability. The CAREC program has provided a practical and flexible platform for infrastructure investment and policy planning.

Through initiatives such as a planned forum for countries to share experiences on banking and market regulation, CAREC 2030 can also help improve the region's investment climate, sustain economic growth, and manage the impact of cyclical economic downturns.

Thirdly, for Central Asia to truly prosper it must commit to cooperating in new areas. CAREC 2030's support for regional initiatives in tourism, agriculture, water resources, health and education will help countries achieve their sustainable development goals. Deeper cooperation will also help countries reach their targets under the COP21 climate agreement.

Cross-border tourism, value-added agricultural exports, and educational exchanges have tremendous untapped potential in Central Asia. But these can only be unlocked through a regional agenda where countries work together and share expertise.

Finally, development in Central Asia will depend crucially on building the capacities of its own people. Enhancing people-to-people contacts will help deepen intra-regional understanding and increase personal mobility. Enhanced business-to-business contacts are vital to increase private sector development and create jobs.

Greater labor mobility will allow people to improve their skills and obtain new jobs. It is encouraging that CAREC 2030 has embraced in principle a regional labor market information system focusing on skills needs and regional job search and placement, as well as cross-border higher education and technical training.

CAREC's new strategy will enhance its convening power for high-level policy dialogue among ministers and senior officials on key development issues. This dialogue needs to be backed with high-quality research by the CAREC Institute, which recently became an intergovernmental organization, and from member countries and development partners to build capacity in areas including education, health, and financial and economic stability.

The broader scope of CAREC 2030 provides new space for development partners like ADB to further support the region's prosperity. It also opens the prospect of exciting new partnerships with other regional programs such as the Belt and Road Initiative.

ADB will commit $5 billion to support CAREC 2030 in the next 5 years. We have just approved a new $800 million Multi-Tranche Financing Facility for CAREC road corridor development in Pakistan. Next year, we will finance the first phase of the Turkmenistan-Afghanistan-Pakistan transmission line project for $150 million. ADB has also already begun discussions for regional projects in agribusiness, tourism, and railways—areas covered in CAREC 2030.

We seek the strong support of all member countries and development partners for the financing and successful implementation of the new CAREC strategy.

By harnessing the collective energies of CAREC member countries, the new strategy will help the region to capitalize on its unique geographical position and proximity to global markets. There is vast potential to improve connectivity and trade between the region's countries, to Europe and beyond.

CAREC 2030 is an opportunity to promote growth, stability, and prosperity in Central Asia. By working together, countries and development partners can secure the future that the region and its people deserve.

Abia seeks cooperation with New York

Abia State Governor Dr Okezie Ikpeazu and his New York State United States (U.S.) counterpart, Andrew Cuomo, met in the U.S. to discussed bilateral cooperation and economic relations between the two states.

The discussion, which held in New York, centered on how such cooperation would positively impact on the Abia economy, and effective harnessing of Abia's natural endowments, creating employment opportunities and external markets for her products, and production of more food for the citizenry.

Cuomo represented by his Director for New Americans, Dr Laura V. Gonzalez-Murphy, told Ikpeazu, who was represented by his deputy Hon. Ude Oko Chukwu, that "We want to equip people to become good entrepreneurs and we advise that Abia state stations somebody here in New York towards enhancing cooperation between our states."

He added that the New York State supports immigration, and thus considers every resident as a member of the New York family, saying "we also provide attorney for any immigrant in need." About 200,000 Abians are said to be resident in New York, some of them have naturalized and became US citizens.

Governor Ikpeazu had long before the meeting, appointed an Aide in the person of Dr Ngozi Ogbonna-Erondu, also in attendance at the meeting, as Coordinator, Abia State Diaspora Brain Trust, "to aggregate the enormous talent of our people who wish to contribute to the development of our state and engage with anybody who wishes to attract any project to the state in any form or manner."

The Governor listed the desired areas of interest for cooperation between Abia State and the New York State as: market for Made in Aba/Abia products, investment in the agriculture, Oil/Gas, large/Medium/Small Scale Enterprises, and Educational Exchange Programmes.

Albania, China have huge untapped potential in tourism cooperation

TIRANA -- Albania and China have huge untapped potential to cooperate in the tourism sector which has turned into a top priority for Albanian government, Ardit Collaku, general director of Albanian National Tourism Agency (NTA) told Xinhua in a written interview Wednesday.

According to Collaku, Albanian government will pay special importance to the building of infrastructure in order to reach remote areas with high touristic impact as well as build eco-resorts along the coastline.

Therefore, he said Chinese companies had an opportunity to come and invest in this sector.

The director said Albanian government was putting a strong emphasis on the development of the tourism sector, which has big potential for growth.

"Being a strategic sector, Albanian touristic offer ranges from awesome cuisine and gastronomy, historical heritage sites like Apollonia, Berat, Gjirokastra, Butrint, cultural events, awesome coastline with turquoise beaches, hiking trails in the Northern Alps, visiting historical castles and museums and so much more," Collaku said.

According to Collaku, Albania as an emerging market has multiple aspects for visitors to discover, including cuisine, bazaar and castles.

The tourism official says Albanian tour operators are well informed of Chinese tourists tastes, and thus have much touristic attractions to offer to the Chinese market.

"We find their interest towards cultural heritage very appealing for our market where different packages are offered, ranging from visiting UNESCO world heritage sites such as Gjirokastra, Berat, Butrint to indulging yourself in the amazing gastronomy and also the stunning beaches of the Albanian Riviera," Collaku said.

And for Albanian tourists, China is also an appealing destination, which had received many Albanian guests.

Speaking about the fact that last summer season, some Albanian tour operators offered tourist packages to visit China, Collaku considering such offer as very attractive.

According to the NTA director, the packages offered by Albanian tour operators to visit China were welcomed by Albanians as they were at very competitive prices.

"Albania, being an emerging market, is exploring new ways and building bridges with countries which once were thought to be far away are now being seen as very attractive places for incoming and outgoing tourism," the director told Xinhua.

Putin in Tehran hails Iran cooperation on Syria, eyes business

Russian President Vladimir Putin met Iran's leadership Wednesday, with the two Damascus allies pushing a peace deal on Syria and looking to boost business despite US opposition to a landmark nuclear deal.

The Kremlin strongman's first visit to Iran since 2015 comes as Moscow seeks to turn its game-changing military intervention in Syria into a concerted push to bring a halt to fighting in the country with the help of Tehran, President Bashar al-Assad's other key backer.

"We are working very productively with Iran and we manage to coordinate our positions on Syria," Putin said after talks with Iranian counterpart Hassan Rouhani and the Islamic republic's supreme leader Ayatollah Ali Khamenei.

The Russian leader insisted that thanks to a joint push with rebel supporter Turkey, "the situation on the ground in the fight against terrorism and the negotiating process are developing very positively".

Khamenei said the "good cooperation between Tehran and Moscow in Syria shows that the two countries can realise their objectives even in difficult terrain", and insisted that all solutions to the conflict come "from inside the country".

Russia, Iran and Turkey pledged after a latest round of negotiations in Kazakhstan on Tuesday to bring the Syrian regime and its opponents together for a "congress" to push peace efforts in the Russian city of Sochi on November 18.

The three key players have organised a series of peace talks in the Kazakh capital Astana this year, agreeing on the establishment of "de-escalation" zones in various parts of the war-torn country.

Rosneft eyes major projects

Putin's visit -- which in addition involved a three-way summit with Rouhani and the leader of ex-Soviet Azerbaijan Ilham Aliyev -- also followed a hike in tensions over the 2015 Iran nuclear deal after US President Donald Trump refused to certify the agreement last month.

Tehran signed the deal, which saw sanctions lifted in return for limits on Tehran's atomic programme, with six countries including Russia and the United States, and Moscow has slammed Trump's "aggressive and threatening rhetoric" against Iran.

While Putin said only that the two sides had discussed the deal, Russian companies looked to press on with taking advantage of the business opportunities that it has presented.

State oil giant Rosneft and the National Iranian Oil Company signed a roadmap agreement with an eye to developing joint projects worth up to $30 billion, Rosneft head Igor Sechin was quoting as saying by Russian news agencies.

Sechin said the two sides were looking to seal binding deals within a year to work on a "whole series of fields, oil and gas", and that eventual output could total 55 million tonnes of oil a year.

The potentially mammoth deal would boost Rosneft's push in the Middle East and aid the Kremlin's ambitions of bolstering its influence in Iran and the broader region.

Moscow and Tehran have had close political and economic relations, and in the nuclear field Russia has already built one reactor at Iran's Bushehr plant and just started work on two new ones.

Syria peace push

The military might of Moscow and Tehran in Syria has helped prop up Assad's forces and turn the protracted conflict in his favour with a string of key battlefield victories.

Since the start of the year, Russia has looked to cement the gains from its intervention by spearheading the peace push at talks in Kazakhstan, positioning itself as a broker between key players Iran and Turkey and largely bypassing the West.

Up until now the focus has been on quelling the violence on the ground and the three powers have established four "de-escalation zones" around rebel-held territory in the country.

The zones were initially credited for bringing about a significant reduction in bloodshed, but international aid groups say they are currently failing to curb the fighting.

Now Moscow seems keen on expanding its peace drive in search of a political settlement.

The push on Syria comes as ties between both countries and Washington have frayed still further since Trump moved into the White House in January.

Despite initial opposition, Trump in August signed off on a sanctions bill targeting Russia, Iran and North Korea after it was passed overwhelmingly by Congress.

Putin's arrival came a day after the US Treasury added 40 Iranian individuals and entities already targeted by sanctions to a counter-terrorism blacklist.