Washington Insider
George Bush’s tax plan: What will it do for the owner-operator?

President George W. Bush has proposed a $1.6 trillion tax cut, that has many people in Washington drooling over the possibility of getting a piece of it for their favorite cause. How the tax cut will be divvied up, however, is far from certain at this point.

The president has stated that his tax cut is meant to be an across-the-board cut for all taxpayers, with the average family’s tax bill to be reduced by $1,600. Bush also says he is firm that the size of the package should not exceed $1.6 trillion. The debate in Congress is focused on whether we want to cut taxes, or use the surplus to pay down the national debt, secure the future of Social Security and Medicare, or improve our nation’s infrastructure (highways and bridges) and schools. In all likelihood, we are going to see a little of each.

There will be pressure from both Democrats and Republicans to modify the president’s plan in different ways. Democrats prefer a plan that would give more tax breaks to those in the lower tax brackets and use targeted tax breaks for the specific costs of families such as education.

Republicans may also try to insert more targeted tax cuts. In the past several years, Republican tax proposals have included specific cuts in the capital gains tax, restoring the tax deductibility of business meal expenses, and increasing the tax deductibility of the cost of health insurance for the self-employed. These tax bills were introduced not necessarily with the belief that they would become law, but with the expectation President Clinton would veto it and have to face the political consequences.

Now with control of the House, Senate and presidency, Republicans will have to balance their desire to fulfill the promises made in those previous tax proposals while honoring President Bush’s tax proposal. The challenge is doing both without pushing the cost of the proposal higher than the president will accept.

As detailed on page 14 of this issue, Sen. Kit Bond (R-MO) has proposed a bill that includes the business meals tax deduction and the tax deduction for the health insurance costs of the self-employed. OOIDA has endorsed these proposals and will be making every effort to get these measures into the final tax bill.

The energy crisis

The problem of high fuel prices continues to be high on the agenda this year in Washington. Everyone agrees that the United States would be better off by reducing our dependence on foreign oil. That is where the consensus ends, however. President Bush and Vice President Dick Cheney, who have significant backgrounds in the oil industry, believe that the best way to reduce our dependence on foreign oil is to produce more oil domestically. One of the most frequently mentioned proposals is to open up drilling in the Alaskan National Wildlife Refuge (ANWR) on the northern coast. Environmentalists vehemently oppose what they consider the destruction of one of the most pristine, untouched, and fragile ecosystems in the world. Sen. John Kerry (D-MA) has promised that he will filibuster (block through delaying tactics) any effort to drill for oil in the arctic. While this is generally viewed as a partisan issue, at least seven Republican senators have said they are opposed to drilling in the ANWR.

Environmentalists believe that the best way to reduce our dependence on foreign oil is through conservation and the overall reduced consumption of oil. Rather than encourage more oil drilling within the United States, they propose giving tax breaks to those persons or businesses that purchase and use energy saving devices.

Any effort that increases the supply of oil should have the effect of reducing its price and should mean lower prices at the pump. But there may be an opportunity for truckers to benefit from the conservation effort as well. Devices such as auxiliary power units that allow drivers to turn off the diesel engine, saving fuel and reducing pollution should be considered a conservation effort and should be treated favorably in any tax break for fuel conservation efforts. These efforts will likely be pursued in a separate energy/tax proposal.

How the tax cut will be divvied up, however, is far from certain at this point

New ergonomics regulations: Do they affect owner-operators?

Much has been said in the news regarding new ergonomics regulations published this past November by the Occupational Safety and Health Administration (OSHA) that establish new requirements upon employers to reduce workplace injuries. Many businesses, including large trucking interests, have voiced strong opposition to these rules. A suit has been filed to block the implementation of these rules, and some in Congress are considering whether to use a seldom-used power to nullify agency regulations within 60 days of their publication. But should owner-operators be concerned?

OSHA regulations are based on an employer’s responsibility to employees. Strictly speaking, OSHA violations may only be brought against an employer. Owner-operators with no employees are not subject to OSHA rules. If owner-operators were legally considered employees, then they would be protected by the rules. If owner-operators have employees they would be subject to the OSHA regulations. 

This does not mean that such rules do not affect the work of the typical owner-operator. While an employer has a duty to set a safety standard in the workplace, the employer can require that it apply to all persons who enter their workplace, not just employees.

For example, take the OSHA rule on industrial powered trucks (such as forklifts) mandating that all persons who use such equipment be certified. This rule was meant to protect both the employees who use such equipment and the employees working in the area in which the equipment is used. Because the rule protects all employees, the employer is required to ensure that all persons who use such equipment in the workplace, including persons other than their employees, are certified. If the employer/loading dock owner allows an uncertified owner-operator to use a forklift, the employer is in violation of the OSHA rules. Although non-employees cannot be held in violation of OSHA rules, this is how non-employees can be affected by OSHA rules.

So, what about the ergonomics rules? According to OSHA, “The purpose of this standard is to reduce the number and severity of musculoskeletal disorders (MSDs) caused by exposure to risk factors in the workplace. This standard does not address injuries caused by slips, trips, falls, vehicle accidents, or similar accidents.” This rule provides broad safety goals rather than volumes of specific standards for each type of workplace that exists. In general, this means the employer is required to reduce or eliminate health problems that occur during the normal performance of the job, where the health problem is the cumulative effect of repetitive physical activity.

In trucking, this could include anything from climbing in and out of a truck, driving, and loading and unloading. Large motor carriers fear that the new OSHA requirements will cost a great deal of money and be difficult to comply with. Motor carriers may be required to provide new trucks and equipment that minimize a driver’s exposure to injuries. Motor carriers may also be prohibited from requiring drivers to perform unsafe lifting and carrying, or from using loading and unloading equipment that contributes to MSDs. Exemptions from the ergonomics rule have been granted to agriculture and other industries. Some members of the trucking industry are asking for a similar exemption for the same reasons that justify exemptions for other industries. Those reasons include an ever changing workplace, and the fact that the trucker’s workplace (his truck and numerous loading docks) are outside of the control of the motor carrier.

Single owner-operators who are not employees and are not employers will not be required as a business to adopt OSHA ergonomics rules. But when such an owner-operator goes to another company’s workplace, that workplace may have rules in place that may affect how an owner-operator can do his job. If an owner-operator violates an OSHA standard at someone else’s business, that business could be liable for an OSHA violation. The owner-operator would not face an OSHA violation, but he or she could be sued under existing laws that prohibit the injury of another person or property, or for the violation of any contractual agreement that required the owner-operator to comply with a work site’s OSHA standards.

The final effects of the ergonomics regulations on owner-operators are not as clear as it is for large motor carriers. These standards may indirectly change the way owner-operators perform their work. They may also spur the improvement of equipment available in new trucks and may improve loading and unloading conditions. Although this rule was considered final last November, its actual effects may not be known for quite some time.