Tax and Insurance Hikes, Speed Limiter Mandate Expected as Democrats Sweep Into Power

Washington D.C. – The fallout from the 2020 election cycle is expected to bring significant changes to America, and specifically to the trucking industry.

Democrats appear to be victorious in both United States Senate runoff elections in the state of Georgia handing control of the chamber to Senator Chuck Schumer (D-NY).




 

On November 3, 2020, the Democrats led by Speaker of the House Nancy Pelosi retained a slight majority in the U.S. House of Representatives.

On Wednesday, a joint session of Congress is formally expected to certify the needed 270 electoral votes giving former vice president Joe Biden a win over President Donald Trump in the 2020 presidential race.

This would give Democrats complete control in Washington D.C.

Many trucking stakeholders and professional drivers are bracing for this new reality and what it will likely mean in the days, weeks, and months ahead.




 

Let’s take a quick look at a few of the changes likely to be implemented in trucking as part of the Democrats’ “progressive” agenda.

Insurance Liability Minimum Increase

Last year, the Democratically-controlled House of Representatives passed legislation that would increase motor carriers’ liability insurance minimum from $750,000 to $2 million.

The controversial $1.5 trillion infrastructure spending bill known as the Moving Forward Act (MFA-HR 2) gained little traction in the Republican-controlled Senate.

A coalition of more than 60 trade groups blasted the Democrats for attempting to arbitrarily raise the minimum during a pandemic.

However, most industry insiders who have spoken with Transportation Nation Network (TNN) believe a similar provision will be included in upcoming legislation in the new Congress.

Tax Hikes

Joe Biden campaigned on rolling back President Trump’s historic tax cuts.

In addition to rolling back tax cuts for working families, Biden’s tax plan calls for raising tax rates on individuals with income above $400,000 including raising individual income, capital gains, and payroll taxes.

 

Biden’s plan also calls for raising taxes on corporations by increasing the corporate income tax rate to 28 percent and imposing a corporate minimum book tax.

While the elimination of the per diem deduction in the Trump tax cuts has been a source of frustration among some truckers, most tax specialists agree company drivers, independent contractors and trucking companies will be forced to cough up more in taxes if Biden’s plan is adopted.

Speed Limiter Mandate

In 2017, the Trump Administration nixed an Obama-era regulation that would have mandated speed limiters in heavy trucks and could have capped speeds at 65 mph.

The regulation was backed by multiple major trucking associations and safety groups, but largely opposed by professional truckers.

 

Insiders expect the same groups to support this measure either through legislative or regulatory action in the months to come likely ensuring it becomes law.

Independent Contractor Model in Jeopardy

In February of last year, the Democratically-controlled U.S. House of Representatives passed the “Protecting the Right to Organize (PRO) Act.”

The PRO Act includes language similar to California’s controversial Assembly Bill 5 (AB5), which imposes an “ABC test” to determine the status of an independent contractor.

At issue, just as in AB5, is the so-called “B prong,” which classifies a worker as an “employee” of the company unless that worker “performs work outside the usual course of the business of the employer.”

Supporters of the PRO Act — such as the International Brotherhood of Teamsters — said the legislation will “restore fairness to the economy.”




 

However, critics within the trucking industry fear, if enacted, such legislation would wipe out trucking’s independent contractor model on a national scale.

The bill stalled in the Senate as Republicans were in control, but that will soon change.

In addition, the Biden transition team announced last week that once Biden is sworn in on January 20, he will immediately issue a memo halting the recent Trump Administration’s Department of Labor (DOL) rulemaking seeking to clarify the definition of an independent contractor.

 

The DOL’s proposed rule would require an “economic reality” test for employees and contractors in order to determine a worker’s status under the Fair Labor Standards Act (FLSA).

Return to Regulation Nation

A Biden presidency promises a return of a tsunami of regulations on the commercial motor vehicle industry.

When President Obama left the White House in 2016, the Federal Register had reached an all-time high page count.

In the early days of his administration, President Trump signed an executive order (EO) requiring two regulations to be cut for every one new regulation that was adopted.

The EO had an immediate impact.




 

Trump’s first three years in office ranked as the three lowest total page numbers in the Federal Register since 2001, according to data compiled by Ballotopedia as part of its Administrative State Project.

Last week, Biden’s transition team confirmed Mr. Trump’s two-for-one EO will be among the first EO’s to be nixed by the new administration.

Electric Vehicle Revolution

A Biden presidency will focus on transitioning the U.S. economy away from fossil fuels and to green energy.

In a speech on December 16, 2020, introducing Pete Buttigieg as his pick to lead the U.S. Department of Transportation (USDOT), Mr. Biden said a top priority will be “getting to carbon neutral as a way to power vehicles.”

“We can own the electric vehicle market,” he confidently stated.

 

Further, he indicated his intention to fund and build at least 500,000 electric vehicle (EV) charging stations throughout the nation.

Hours of Service Reform

One of the Trump Administration’s signature trucking achievements was streamlining and implementing hours of service (HOS) reform.

However, those reforms could also now be in jeopardy.

The Moving Forward Act passed by House Democrats last year would have halted the implementation of the new HOS rule until it could be further studied.

The recent HOS reforms were vehemently opposed by the International Brotherhood of Teamsters, a major constituency of the Democratic party.




 

While it would seem that undertaking a new rulemaking to roll back these reforms might not be at the top of a Biden Administration’s agenda, multiple trucking executives recently told TNN it will likely not be off the table.

Congress could also get involved on this issue as well.

TNN will be closely watching new developments on each of these issues and many more in the days ahead.

 


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