Engineering Inc. - May/June 2013 - (Page 6)

A CHRIS MADDALONI/GETTY IMAGES CEC submitted a statement of tax principles to the House Committee on Ways and Means in April, calling for comprehensive reforms that treat C corporations and pass-through businesses—such as S corporations and partnerships—equally. The Council also recommended that the tax code support innovation and the competitiveness of American firms in the global marketplace by encouraging research and develop- Rep. Dave Camp (R-Mich.) ment, as well as investment in new equipment and technologies. ACEC also stressed that the tax code should promote the development of the nation’s critical infrastructure, including highways, bridges, energy, transit systems, water and wastewater. Ways and Means will develop tax reform legislation this year based in part on the input it receives from stakeholder groups. The Senate Finance Committee is also analyzing tax reform options with the goal of producing legislation. One tax change under consideration by Ways and Means Committee Chairman Dave Camp (R-Mich.) is limiting the use of the cash method of accounting to sole proprietors and firms with less than $10 million in revenues. ACEC has alerted the committee that the proposal would create serious cash-flow problems for many engineering firms if they were required to switch to accrual accounting. The committee has asked for additional information on this issue. 6 ENGINEERING INC. MAY / JUNE 2013 P resident Obama’s F.Y. 2014 budget proposal includes $50 billion in new infrastructure investments and new tax revenues to reduce the deficit. The plan would fully fund MAP-21 programs and allocate an additional $25 billion for highways, $9 billion for transit, $5 billion for passenger rail and $3 billion for aviation infrastructure. The reauthorization of the passenger rail program would provide $40 billion over five years to improve existing service and develop new high-speed rail corridors. To leverage private and public sources of capital, the president would create a National Infrastructure Bank and the America Fast Forward tax-credit bond program. ACEC strongly backs fully funding MAP-21 and continues to support innovative financing mechanisms—including the National Infrastructure Bank—to supplement traditional funding streams for transportation projects. Funding for airport projects under the Airport Improvement Program is reduced from $3.35 billion to $2.9 billion in 2014, but the budget proposes raising the cap on Passenger Facility Charges from the current $4.50 per ticket to $8. The budget submission proposes cuts to federal water programs, reducing funding for the State Revolving Fund programs by $472 million. The budget does, however, propose lifting the cap on Private Activity Bonds for water and sewage projects, a policy long advocated by ACEC. The president proposes numerous tax changes, including business incentives for new investment and making permanent the tax credits for research and development, renewable energy and energy efficiency. The package would raise nearly $600 billion in new tax revenue through requiring households with annual incomes of more than $1 million to pay at least 30 percent in taxes, limiting the value of tax deductions and other tax benefits for upper income households, and raising new revenues from various business sectors. One tax change has raised concerns among state and local governments, including the National League of Cities, as well as ACEC and other stakeholders. The budget proposal seeks to limit tax deductions for higher-income Americans, which in turn will impact investments in tax-free municipal bonds and limit the ability of local governments to raise revenues for infrastructure projects. ACEC is working with these organizations to protect municipal bond financing. JACQUELYN MARTIN/AP PHOTO ACEC Submits Tax Reform Principles To Congress President’s Budget Proposes National Infrastructure Bank JOHN HUMBLE/GETTY IMAGES Legislative Action

Table of Contents for the Digital Edition of Engineering Inc. - May/June 2013

Engineering Inc. - May/June 2013
From ACEC to You
Market Watch
Legislative Action
2013 Engineering Excellence Awards
Annual Convention Wrap-Up
Mobile Power
Guest Column
Business Insights
Members in the News
Mergers & Acquisitions

Engineering Inc. - May/June 2013