In a year when good news has been hard to come by in our industry, we received very good news this week out of Washington, D.C.: We’re not only making progress towards our tax priorities, but we may even come out ahead.
Let’s start with what happened back in 2017: When President Trump signed his landmark tax bill in 2017, some changes to tax law were permanent, while others were only temporary. The corporate tax provisions, including the 21% corporate tax rate, were permanent. However, changes to the personal side of the tax code were temporary with a firm expiration due to budget constraints.
One of those temporary changes was the introduction of Section 199A which allows family-owned businesses, like our member’s businesses, to deduct 20% from qualified business income on their personal taxes. This provided some much-needed relief for pass-through entities facing a top marginal individual tax rate compared to the 21% corporate rate.
Section 199A has been critical to reducing the tax burden on wholesaler businesses over the last few years, enabling WSWA’s members to invest in their warehouses, employees, new equipment, and their communities. It is a critical provision that family-owned wholesalers depend on.
Since 2017, there has been a lot of turnover in Congress. Many of the lawmakers working on today’s tax bill weren’t even in office back then. But WSWA has been working diligently ever since to build and grow relationships, with both old allies and new champions.
How do we do that? We start with one of the best teams in Washington. Our in-house lobbyists are hooked into real decision makers and have the tools to succeed. Our PAC, generously supported by employees across our membership, allows us to support new lawmakers in a friendly, constructive way. We strategically use our resources to ensure we’re meeting with Members of Congress and their staff year-round.
We have amazing, engaged and informed members who understand the importance of political involvement and are willing to host and attend roundtables, do warehouse tours, and contribute to our PAC.
This week is proof that our strategy is paying off. The House tax writing committee released its bill this week, and not only does it preserve Section 199A, it makes it permanent, and increases the deduction amount. This didn’t happen because of one conversation, but it’s the result of hundreds of conversations over the last seven years. These wins don’t happen at once; they come from long-term investments in relationships, time and resources over years.
Our philosophy is simple: Be in the room when decisions are being made. Not just here in Washington but by bringing Members of Congress into our warehouses across the country and letting them see first-hand the impact our members have on their local communities. That’s where all of our tools matter: our members, our staff, our PAC, and our ability to engage in a variety of ways that ensure our member’s voice is heard consistently, in every room.
This week, we’re welcoming many wholesalers to Washington to visit Capitol Hill, share their stories, use their voices, and explain why their business matters.
We’re excited to say “thank you” to Members of Congress who helped move the ball forward and encourage them to keep moving in the right direction.
One final note: this is a marathon, not a sprint. There are many more stages in the process and things will change. But you can be confident in knowing that our team will keep fighting for you, using every tool at our disposal to support America’s family-owned wine and spirits wholesalers.