UPDATE: Almy wants “reasonable compensation” set as $50K per year, gave away more than that to “leftwing” causes

Pocket change?

The House Ways and Means Committee will hold a hearing Thursday on a measure, HB 1607, to define “reasonable compensation,” the amount of compensation that will be exempt from taxation under Gov. John Lynch’s new LLC tax, at $50,000 per year.

The measure is sponsored by committee chair Susan Almy.

But Almy may be a uniquely flawed messenger.

That’s because Almy, who is vastly wealthy and ironically lives on Poverty Lane in Lebanon, gave more than $50,000 to liberal candidates and causes in each of the last three election cycles.

In fact, in 2008 Almy gave almost $64,000 to liberal candidates and causes.

NowHampshire.com has learned that at least one conservative organization will distribute a flier at Thursday’s hearing itemizing Almy’s contributions. NowHampshire.com has obtained a copy of the flier, which refers to Almy as the state’s “Pay Czar” and calls her “an elitist, out of touch, enemy of NH small business owners.”

Rep. Almy did not respond to our request for comment.

UPDATE: Susan Almy reacted to the attacks this morning to NowHampshire.com:

These people are really playing dirty. I have not seen it. For the record – I give away most of what I make, and mostly to charities, not candidates.

As for reasonable comp – I’ve been sending replies to everyone that emailed from around the state until yesterday; we had to be on the voting floor 9 to 7 yesterday and I had stuff after and before I was required to do. I spent Monday night racing to Grantham to sit in our their Chamber of Commerce and learned about the lies they’re spreading about reasonable comp. Kevin Purcell wanted me to call him two days ago but I can’t get free of my responsibilities when he answers his phone till Friday. I want to go see Paul Boucher about a meeting Friday in order to talk to Lebanon businesses. Today I have the hearing on the reasonable comp bill from 9 to noon and then 4 other hearings and then tonight Conserv Comms. Sorry for all this, I just woke up after getting in late, and have to leave soonest.

The basis of the reasonable comp bill is that every small business operating as a corporation, and now as an LLC as well, has to assign its owners that do work for it what it thinks is “reasonable” to pay them for that work alone. Which is, what theu would have to pay an equally competent individual to do that work. This has been in our tax law since 1970 and the BPT. That sum does two things: it cuts the profits the firm has to pay on, because the reas comp is deducted as a cost of business; and then the owner who took money from the firm turns to his I&D form, he only reports as dividends (drawings) any excess over that reas comp. The problem is current law only gives the firm and therefore owners a safe harbor of $6K before they have to prove to DRA that more compensation is reasonable, and the law is quite vague about standards for reasonableness, and although the DRA says it is trying to be reasonable, I’ve heard cases where it sounds like individuals didn’t know how to justify themselves and got forced down to ludicrous sums they could claim. So we started last term trying to update this, and ran into every profession wanting it a different way, and sent the BIA ,CPAs ands lawyers and their clents off to make a deal among themselves. The new commissioner, Clougherty, was determined to get it done right and out in public rules and law, and all those groups and everyone they or we could recruit on websites or meetings (I spoke and passed stuff out at Leb Rotary and talked to people at a Business After Hours) – all these groups have been working since July to produce the bill I am presenting today, that takes the safe harbor up to $50K and then makes it easier to figure out how to claim more. Next week my committee will have a subcommittee of our most experienced businesspeople and the skeptics that care about the details to meet with everyone who still has problems with it and figure out the best we can make it, before the Feb deadline that would get this in law in time to alleviate the LLCs that are having to deal with it for the first time. Most of the Rs unfortunately don’t care about details at this point, they have been told be their party since last fall that it is party doctrine to kill it and say we are just trying to hurt small business – whic is the opposite of the truth.

The LLCs are the part of this that have made it possible for the Rs to warp everything. We had, for constitutional equal treatment reasons, to remove the exemption someone snuck in the I&D law for them before they even existed I this state, an sCorp was preparing to sue. Ask Bob Moses about that, he doesn’t like it but told me “yes, you had to” when I asked him and another accountant. But the more profitable LLC owners naturally don’t want to pay taxes, even if their identical twin corporate owner is doing so.