Tag Archives: winners

Federal Government Tax Reform: What It Means for You

The Republican-led Congress and administration have now embarked on a debate over another feature piece of legislation promised during the 2016 campaign: tax reform. At this writing, the Republican-led House of Representatives has introduced its far reaching reform proposal, which it claims focuses on a tax savings for middle-class Americans. Along with White House regulatory reforms, the House says the bill will provide tax savings and incentives for American businesses, especially those with overseas or offshore operations.

Working alongside the majority party in Congress, the White House is expecting delivery of a complete tax package to the President’s desk before Christmas. The steady grind of the legislative machine in both the US House and Senate since the end of the August recess may drive this package through (loopholes and all), especially if the House and Senate can make a final deal with disgruntled Republicans and some nationally recognized outside groups like the Mortgage Bankers Association, national real estate organizations, and others who are on the fence.

Though the philosophy of the majority party is to move this process through before too many stakeholders weigh in, there are those who believe that the package as written, containing a limit on interest deductions for new home purchases of $500,000 or more and an expansion of the standard deduction (as outlined in a November 3 New York Times article), is a losing proposition, too difficult to sell to their constituents. In the same New York Times article, others, including Congress’s Joint Committee on Taxation and the independent Tax Foundation, find that America’s highest earners would receive at least twice the tax cut that middle-class workers would get, as a percentage of their income.

Democrats, along with other outside groups who sit in opposition to the package, say that the plan is not well thought-out and is moving too quickly. It will harm, not help, middle-class Americans because it will raise taxes. Meanwhile, it will eliminate some much sought-after and expected annual tax staples such as state and local tax write-offs (businesses will continue to be able to deduct state and local taxes incurred in the conduct of a trade or business) and House reductions in the mortgage interest cap. Also, it will use funds from the elimination of important programs, such as the CHIP and state Medicaid Expansion, which were put in place to help middle-class Americans. Opponents say this, along with other loopholes, is all to help pay for a tax reform package designed to help wealthy taxpayers.

Concerns for Members

A look at the tax reform package reveals some issues—changes for the average American and for musicians and others in the media and entertainment fields.

The House Ways and Means Committee, the committee that oversees the drafting and implementation of tax legislation, has outlined what the new tax law does. You can read the Tax Cuts and Jobs Act at https://waysandmeans.house.gov/taxreform/. The committee states that the bill:

Lowers individual tax rates for low- and middle-income Americans

Eliminates special-interest deductions

Establishes a new Family Credit, which includes expanding the Child Tax Credit

Reduces the tax rate on the hard-earned business income of Main Street job creators

Significantly increases the standard deduction

Takes action to support American families

Preserves the Child and Dependent Care Tax Credit

Lowers the corporate tax rate to 20%

Opposition forces say that the bill falls short of all these goals and leaves the average American subsidizing proposals that only benefit the rich.

Yeh Shen of Local 6 (San Francisco, CA) states, “Under GOP’s tax plan, all of the necessary costs associated with maintaining a freelance career and professional activities are not tax deductible, if players continue to be paid as W-2 wage [earners].”

Winners v. Losers

But, who are the winners and losers? An article from The Hill  describes who stands to gain and who stands to lose. Here’s a summary:

Winners—Corporations will see their tax rate go down from 35% to 20%. Companies would be allowed to deduct the full costs of buying new equipment for five years. And businesses that had been keeping profits overseas to avoid the 35% tax rate would be able to bring the money back, or repatriate to the US, and pay only a 12% tax for cash assets. Major business groups like the US Chamber of Commerce and the National Association of Manufacturers back provisions to lower rates for businesses, in order to move to a “territorial” tax system that exempts dividends from companies’ foreign subsidiaries and to enhance expensing of capital investments.

Super wealthy individuals will keep the top tax rate in place, but they have a lot to gain from the bill.  First off, the income tax bracket thresholds increase, which will accrue savings at the top. Second, the bill would double the limit on the estate tax and then phase it out altogether. Currently, the estate tax only applies to estates of $5.5 million or more, and twice that for couples. The bill would immediately double that, giving tax shelter to anyone with an estate between $5.5 million and $11 million (or, again, double those amounts for couples). After a few years, the tax would be eliminated altogether, meaning that the very wealthiest in the country could receive their inheritances tax-free. Third, the plan would lower the taxation rates of “pass-through” corporations, or S-corps, to 25%, allowing certain business owners to claim part of their income at the lower rate. Fourth, it would eliminate the alternative minimum tax, which was intended to create a floor on tax exemptions.

Losers—Blue states, the budget deficit, universities, homeowners, and nonprofit organizations.   

House v. Senate Bills

As for House and Senate bill comparisons, Sarah Babbage from Blumberg outlines direct differences in the bills. You can read her analysis at: https://about.bgov.com/blog/bgov-onpoint-comparing-house-senate-tax-bills/.

For musicians, the tax plan in its earliest form hit on two issues that would have directly impacted artists and their supporting institutions. The first was a provision in the code that provided the time and manner rules for electing capital asset treatment for certain self-created musical works. The original temporary regulatory proposal was published in the Federal Register February 8, 2008. No comments appeared in response of the proposed rulemaking and no request for a public hearing was received. The Treasury then decided to adopt the proposed regulation with some minor changes. However, on November 6, 2017, the provision was removed from the Ways and Means Manager’s Report. The Manager’s Report would have allowed a taxpayer to treat the sale or exchange of a musical composition or a copyright of their personal musical work as a capital gain or loss.

Secondly, the House bill eliminates certain language referring to business entertainment write-offs. This could mean fewer business professionals using theater, restaurant, and other performance venues as write-off activities for their clients. Section 3307 entitled “Entertainment, etc. Expenses,” denies a business deduction for entertainment, amusement, recreation, and other fringe benefits in the media and entertainment industry to embrace or entice business partners. The provision goes on to say: “No deduction otherwise allowable under this chapter shall be allowed for amounts paid or incurred for any of the following items … this may impact any entertainment, amusement, or recreation activity; membership dues; amenities not directly related to the taxpayers trade or business; or on-premise athletic facilities, not related to a trade or business.” 

The Senate bill, introduced November 14, is currently under debate. We must consider that, at this writing, the House bill is still under consideration and the Senate bill, though just introduced, has additional changes. No new policy is set in stone until the chamber has a final vote on it. However, we expect those votes very soon. The AFM will continue to work with its affiliates and outside partners to help mitigate the negative effects of this legislation.

2017 AFM member Grammy winners

Congratulations to the 2017 AFM member Grammy Winners

Congratulations to the 2017 AFM member Grammy winners from signatory recordings listed here. The benefits of recording under the AFM Sound Recording Labor Agreement (SRLA) are compelling. Musicians receive at least the standard wages for sound recordings, which include pension fund contributions and health and welfare fund contributions. Properly filed report forms are submitted to the Sound Recording Special Payments Fund (SPF), which secures participation in proceeds from that fund for each of the next five years. Further, if the recording is licensed for use in other areas (motion pictures, theatrical motion pictures, commercial announcements, etc.) the AFM will bill for the appropriate “new use” payments on behalf of the musicians involved.

Best Traditional Pop Vocal Album: Summertime: Willie Nelson Sings Gershwin, Willie Nelson of Local 433 (Austin, TX) [Legacy Recordings]

Best Country Duo/Group Performance:  “Jolene,” Pentatonix, including Kevin Olusola of Local 47 (Los Angeles, CA)
and featuring Dolly Parton of Local 257
(Nashville, TN) [RCA Records]

Best Improvised Jazz Solo:
“I’m So Lonesome I Could Cry,” track
from Country for Old Men, John Scofield
of Local 802 (New York City) [Impulse!]

Best Jazz Instrumental Album: Country for Old Men, John Scofield [Impulse!]

Best American Roots Performance: “House of Mercy,” track from Undercurrent,
Sarah Jarosz of Local 257 [Sugar Hill Records]

Best American Roots Song: “Kid Sister,” track from Kid Sister, Vince Gill and Time Jumpers of Local 257 [Rounder Records]

Best Americana Album: This Is Where I Live, William Bell of Local 148-462
(Atlanta, GA) [Stax]

Best Folk Album: Undercurrent, Sarah Jarosz of Local 257 [Sugar Hill Records]

Best Musical Theater Album:
The Color Purple [Broadway Records]

Best Score Soundtrack for Visual Media: Star Wars: The Force Awakens, John Williams of Locals 9-535 (Boston, MA) and 47
(Los Angeles, CA) [Walt Disney Records]

Best Historical Album: The Cutting Edge 1965-1966: The Bootleg Series, Vol.12 (Collector’s Edition), Bob Dylan of Local 802 [Columbia/Legacy]

Producer of the Year, Non-Classical:
Greg Kurstin of Local 47

Best Orchestral Performance:
Shostakovich: Under Stalin’s Shadow
—Symphonies Nos. 5, 8 and 9
, Boston
Symphony Orchestra of Local 9-535,
conducted by Andris Nelsons

Best Opera Recording: The Ghosts of Versailles, John Corigliano & William M. Hoffman, Los Angeles Opera Orchestra of Local 47 and Los Angeles Opera Chorus, conducted by James Conlon.

Best Classical Compendium: Michael Daugherty: Tales of Hemingway; American Gothic; Once Upon a Castle, Nashville
Symphony of Local 257, conducted by Giancarlo Guerrero

Best Contemporary Classical Composition: Michael Daugherty: Tales of Hemingway;
American Gothic; Once Upon A Castle
, Nashville Symphony of Local 257,
conducted by Giancarlo Guerrero

ILCA Award Winners

AFM Publications Among ILCA Award Winners

Each year the International Labor Communications Association (ILCA) recognizes the best and most inspiring work in labor communications and journalism. Among the winners were several AFM local submissions.

AFM Local 47 (Los Angeles) took a first place award for General Excellence—Print and Internet / Electronic Newsletter / Local unions for The Local 47 Beat 2014. Plus, Local 47’s website (afm47.org) was recognized in the Internet Awards / Best Design Internet / Local unions category.

overtureThe local also received a second place Writing Award—Print and Internet / Saul Miller Awards /Political Action / Local Unions for the story “Hollywood Seeks Sharper Teeth for Film and TV Tax Credit Program.” The article covered new legislation to beef up California’s existing tax incentive program to help stem runaway production and bring more scoring work to the state.

The article quoted musicians such as rank-and-file violinist Rafael Rishik who gave the Labor Caucus at the California Democratic State Convention in downtown Los Angeles a firsthand account of the problem. “For generations, some of the greatest musicians in the world have been drawn to California because of the motion picture and television industry,” he said. “Over the past few years, runaway film productions have been a big hit to our economy. This is especially hard for musicians because companies that take film tax credits increasingly score their films overseas, and we lose out on that work.”

Coverage of this important issue also included quotes from union officials. “Musicians represented by locals across the country are working together to change our industry” said AFM Organizing Director Paul Frank. “AFM members are uniting in order to win higher standards and grow the strength of our union.”

allegroYou can read the complete piece at: www.afm47.org/press/hollywood-seeks-sharper-teeth-for-film-and-tv-tax-credit-program/.

New York City AFM Local 802’s Allegro Magazine was awarded a second place in the General Excellence—Print and Internet / Print / Local Union Publications / 1,001-10,000.

And finally, our union’s publication, International Musician, received second place recognition under the category Writing Awards—Print and Internet / Best Profile / National / International Unions, for the story “New Orleans’ Musical Chameleon and Passionate Union Advocate” about Local 174-496 (New Orleans, LA) President Deacon John Moore.

afm deaconThe profile recognized a longstanding, selfless union advocate. “I choose to be president because I want to serve the music community. I think I can be a role model for younger musicians. I want to make a better workplace for all our musicians,” said Moore.

To read the complete story visit the website: internationalmusician.org/deacon-john-moore/.