Bill Would Accelerate Depreciation On Capital Purchases ...
Such As Business Airplanes
Senate Finance Committee Chairman Max Baucus (D-MT) and Senate
Committee on Small Business and Entrepreneurship Chair Mary
Landrieu (D-LA) released the Small Business Jobs Act on Tuesday, a
bill they say will help small businesses access capital,
stimulate investment in small businesses and promote
entrepreneurship – all of which will help small business
create jobs.
“Small businesses are the engine of our economy and need
to be a critical focus of our job-creation efforts. Helping
small businesses helps get Americans back to work,” said
Baucus. “Working together, we crafted our bill to
promote entrepreneurship and investment in small businesses and
provide small businesses with the vital access to capital they need
to create jobs.”
“Every day, headline after headline goes to big business
layoffs and losses, but in reality it is the small businesses and
their employees that are bearing the brunt of this crisis,”
said Landrieu. “Since the start of the economic
downturn, 80 percent of the country’s job losses came from
small businesses. It is time to turn our attention to the
small businesses and entrepreneurs to get Americans back to
work. By providing some cost-effective and commonsense
changes to lending, contracting and technical assistance programs,
we can build on successful programs implemented in the Recovery Act
to help small businesses keep their doors open. Ranking
Member Snowe and I have crafted this package to include provisions
that we have both advocated for, and I am very pleased with the
finished product. As we finalize our package, I look forward
to working with my colleagues on both sides of the aisle, as well
as the other committees, to ensure the swift passage of this
legislation.”
Senator Baucus
According to the committee chairs, the Small Business Jobs Act
will help small businesses access capital. It will accomplish that
in a number of ways.
- The legislation encourages investment in small businesses by
allowing investors to exclude the gains from the sale of certain
small business stock from their income for tax purposes if the
stock is held for more than five years. This policy helps
small business owners access more private capital to finance an
expansion and hire new workers.
- The legislation reduces the tax burden for small businesses by
allowing them to carry back general business tax credits to offset
their tax burdens from the previous five years. Small
businesses will also be able to count the general business credits
against the Alternative Minimum Tax (AMT), freeing up capital for
expansion and job growth.
- The legislation establishes a Small Business Lending Fund of
$30 billion to provide capital investments to small community banks
to increase small business lending. The fund is limited to only the
smallest banks, those who hold less than $10 billion in assets, and
the performance-based program would incentivize only those lenders
that extend new credit by decreasing the dividend rate banks pay as
they increase lending.
- The legislation establishes the State Small Business Credit
Initiative to provide $900 million in grants to existing successful
state small business programs that help private lenders extend more
credit to small businesses.
- The legislation raises the cap on small business loans to
increase lending by $5 billion in the first year after enactment,
and refinances commercial real estate debt into long-term,
fixed-rate loans, provisions that are expected to be budget neutral
and could create or save 200,000 jobs.
- Building on successful initiatives we put in place through the
Recovery Act, by making simple and cost-effective changes to the
SBA’s two largest lending programs and to its microloan
program, we were able to pump more than $20 billion into more than
40,000 businesses in our economy. This legislation calls for
an extension of these lending provisions through December 31,
2010.
- Increase Small Businesses’ Ability to Make
Investments
Senator Landrieu
The legislation also allows taxpayers to write off more of the
cost of purchases for their business, such as equipment and
machinery, in the year the purchase is made. The legislation
also expands the types of purchases that would qualify for special
expensing to include some types of real property, such as
leasehold, retail and restaurant improvements. When small
businesses are able to deduct the cost of purchases more quickly,
they have more cash on hand to create jobs.
Senators Baucus and Landrieu also say the bill promotes
entrepreneurship, in that:
- The legislation doubles the amount of start-up expenditures
that may be deducted by someone starting a small business, making
it easier for new businesses to open.
- The legislation authorizes increased resources to support the
Office of the United States Trade Representative’s small
business export promotion and trade enforcement activities.
These efforts help U.S. small business exports grow in foreign
markets and ensure small businesses compete on a level playing
field.
- The legislation allows self-employed individuals to deduct
health insurance costs for purposes of paying the self-employment
tax.
- The legislation improves the Small Business
Administration’s (SBA) trade and export finance programs,
elevates the Office of International Trade within the SBA and adds
export finance specialists to the SBA’s counseling
programs.
- The legislation establishes the State Export Promotion Grant
Program (STEP), which would increase the number of small businesses
that export.
- The legislation allows the SBA to waive or reduce the
state-matching share of its funding requirement for up to one year
to continue providing technical assistance to underserved
communities to start and grow small businesses.
Finally, the senators say that the bill promotes equity, in
that:
- The legislation promotes tax fairness by preventing small
businesses from incurring large tax penalties aimed at large
corporations and wealthy individuals investing in tax
shelters.
- The legislation removes the red tape and closes loopholes that
too often put government work into the hands of multinational
corporations, instead of Main Street businesses.
- The legislation makes clear that no single contracting program
receives priority over another program when competing for federal
contracts.
- The legislation is fully paid for, closes unintended tax
loopholes and reduces the tax gap.