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February 18, 2007 at 02:00 PM
Controversial provisions narrowing non-qualified deferred compensation packages that were included in Senate minimum wage legislation are unlikely to become law soon as a result of action the House was expected to take after press time.
However, industry lobbyists and lawyers cautioned that the provisions are expected to re-emerge later this year in a more focused form in both the House and the Senate.
The House was scheduled to act Feb. 16, depending on other business, on tax legislation reported out Feb. 12 by the House Ways and Means Committee that did not include the controversial provisions.
That tax package is expected to be ultimately twinned with legislation passed by the House in January that called for an increase in the minimum wage in 3 steps over a 25-month period.
David Stertzer, CEO of the Association for Advanced Life Underwriting, said he expects the House/Senate conference to resolve the conflicting bills to take place in late February or early March.
The House bill would extend business tax credits and increase the amount of capital spending that a business can write off. It also would give restaurants a break on how to calculate deductions for Social Security taxes paid on tips.
According to congressional estimates, the House tax cuts would cost the Treasury $1.3 billion in lost revenue over 10 years, while those in the Senate bill would cost $8.3 billion over 10 years.
Stertzer said a broad coalition of organizations–including the U.S. Chamber of Commerce, which strongly opposes the deferred comp proposal–is working to ensure these provisions are not included in the minimum wage legislation.
“AALU is continuing its vigorous Capitol Hill outreach urging that final legislation not include a Senate proposal that would have a very harmful effect on the ability of hundreds of thousands of employees who use deferred compensation to adequately save for retirement,” he said.
“Congress has already enacted extensive rules that address any concern about deferred compensation, and businesses are still awaiting hundreds of pages of guidance from the IRS,” Stertzer noted.
