By Stephen Barlas
As Congress gets ready to take on tax reform, metal fabricators will be watching whether any final bill establishes lower tax rates for pass- through companies.
With regard to tax rates, some congressional representatives on both sides
of the aisle agree that the top corporate rate should drop from the current 35
percent to somewhere in the 20s. It is generally known that Democrats aren’t
going to buy a rate in the low 20s.
What is more controversial is the rate for pass-through entities, which are typically S corporations, limited liability companies, and partnerships. These companies pay at the individual rate, the top rate of which is currently 39. 6 percent,
and this rate is not likely to decrease nearly as precipitously as the corporate
That is a problem for many small-business sectors, including fabricators.
Both President Donald Trump and the House Republicans’ “A Better Way” plan,
But some tax policy experts and nearly all Democrats complain that a sepa-
rate, lower pass-through rate would lead to tax avoidance. That is the argument
that Sen. Ron Wyden, D-Ore., a top Democrat on the Senate Finance Committee,
“Any tax change that allows tax cheats to abuse pass-through status by ‘
self-declaring’ to avoid paying their fair share and dodge Social Security taxes would
be worse than what’s on the books today,” Wyden said. “The day the pass-through loophole becomes law would be Christmas morning for tax cheats.”
Republicans would like to pass a tax reform bill through Congress without
needing Democratic votes, but that just can’t happen. They will need bipartisan
help in the Senate because any bill needs 60 votes to pass and there are only 52
OSHA Beryllium Proposal Sparks Controversy
Political potshots are coming from all angles as various parties complain about
the Occupational Safety and Health Administration’s proposed changes to its
January 2017 beryllium workplace rule. It established a new, tighter permissible exposure limit (PEL) for companies in the general industry category, which
includes fabricators, and applied that PEL for the first time to the marine industry, where a lot of welding is done.
Beryllium is present in almost all metals, and operations such as grinding
and welding result in beryllium wa;ing into the workplace environment. We
reported about OSHA’s late June proposal to rescind the medical monitoring
provisions of the new standard as they apply to the construction and marine
industries, but not for general industry.
The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (US W) is strongly opposing that
move as are other groups. Simultaneously, companies in the general industry
category are taking the opportunity to urge the Trump OSHA to make changes
for them too. Their key objective is to expand the exemption in the new standard,
which was whittled down as the Obama OSHA prepared the final standard.
The final rule stated: “This standard does not apply to materials containing
less than 0.1 percent beryllium by weight where the employer has objective
data demonstrating that employee exposure to beryllium will remain below the
action level as an 8-hour TWA [time-weighted average] under any foreseeable
John Hoerner, executive vice president, Century Aluminum Co., told OSHA
that the narrower exemption means that employers that process or use materi-
als containing any amount of beryllium now have the burden to demonstrate
that exposure levels can never exceed the action level, which he calls “vanish-
The final rule reduced the PEL to 0.2 ;g/m3 from 2.0 ;g/m3 and established a
new short-term exposure limit of 2.0 pg/m3 over a 15-minute sampling period
and an action level of 0.1 pg/m3 as an 8-hour TWA.
Century Aluminum Co., www.centuryaluminum.com
Occupational Safety and Health Administration, www.osha.gov
United Steelworkers, www.usw.org
Read more from Stephen Barlas at www.thefabricator.com/author/stephen-barlas
New, lower tax rate for pass-through entities
up for grabs
Could a tax rate in the 15 to 25 percent range be possible
for these companies?