Date: 6-15-10 – For Immediate Release
Contact: Kevin Lawlor, 202 225 5311
Washington, DC – Today, Rep. Frank Kratovil backed HR 5486, the Small Business Jobs Tax Relief Act, legislation designed to create jobs for middle class Americans by providing important tax incentives to help small businesses grow, hire, and fuel our economy.
HR 5486 included bipartisan language authored by Congressmen Frank Kratovil (D-MD) and Chris Lee (R-NY) designed to encourage and facilitate new business formation, entrepreneurship, and job creation. The language was taken from H.R. 1552; The Small Business Formation and Job Creation Act introduced on March 19th, 2009 and will increase the maximum deduction for business start-up expenses under Section 195 of the Internal Revenue Code. Kratovil’s proposal had won the support of a bipartisan group of 100 co-sponsors.
Under the current tax code, the maximum deduction for business start-up expenses is limited to $5000, while additional expenses are left to be amortized over a longer period of time. The legislation increases the start-up deduction from $5,000 to $20,000 in order to provide additional tax relief for entrepreneurs and small business owners during a time when accessing capital is extremely challenging.
“I have been fighting for this legislation from the day I introduced it because we need to be doing more to help the men and women in Maryland who have the courage to take risks during these tough economic times by starting new businesses and creating new jobs,” said Rep. Kratovil. “At a time when jobs must be our top priority, this bill will encourage entrepreneurship and innovation and reward the risk-takers who are creating good jobs right here in Maryland,” said Rep. Kratovil.
This bill is intended to serve as an added incentive for entrepreneurs to get off the sideline and create a new engine for job growth. The increased tax incentive is designed to motivate entrepreneurs to act now instead of waiting for this recession to pass.
“The men and women who own and operate small businesses are the driving force behind job creation, employing half the nation’s private work force. These entrepreneurs need encouragement and motivation to create jobs and spur innovation in these challenging times; giving them a start-up expense tax break will do exactly that. Instead of rewarding failing companies and executives who created this economic crisis, it’s time to focus on small business owners and families,” said Rep. Kratovil.
Kratovil ‘s legislation was also included HR 4849, which passed the House on March 24th as part of a previous small business package, but the Senate has not yet taken action on that bill. The passage of today’s bill creates another opportunity to move the startup deduction through the Senate and see it passed into law.
In addition to Rep. Kratovil’s provision, the Small Business Jobs Tax Relief Act also includes provisions that Increase the capital gains tax cut for those who invest in small businesses this year and excludes 100% of capital gain income for stock in small businesses purchased from March 15, 2010 to January 1, 2011. The bill also provides tax relief for small businesses by fixing a tax shelter disclosure penalty (Section 6707A) that disproportionately impacts small businesses.
If we want to create jobs, we have to help small businesses.
If banks don’t want to lend to qualified small businesses,
the SBA should lend directly.
Washington, DC – U.S. Senator Benjamin L. Cardin (D-MD) today joined colleagues from the Senate Small Business and Entrepreneurship Committee, including Chairman Mary Landrieu (D-LA) and Senator Jeanne Shaheen (D-NH), on the Senate floor to highlight the urgent need to help America’s small businesses get the credit and resources they need to thrive and create new jobs. Senator Cardin’s full remarks can be found at cardin.senate.gov and www.youtube.com/SenatorCardin.
“As a country, we need to create jobs and the way to create jobs is to help small businesses. Too much of the focus over the last couple of years has been on helping large companies and large banks. We need to focus on small companies in order to create new job opportunities for Americans. Sixty-four percent of the net new jobs over the past 15 years have come from small businesses. It’s where job growth will be in the future.
“Problem number one for small businesses is credit. Small companies can’t get traditional credit. Many large banks have just closed out giving loans to small companies. As a result, many small companies resort to the use of their personal credit cards to finance their business. One-third of small companies have over 25 percent of their overall debt from credit cards and 50 percent of small business interest rates are 15 percent or higher. That’s not sustainable.
“We should look at how we can use some of the TARP funds to have the SBA make direct loans to small businesses, certainly as a backup, if the private-sector lenders are not going to show enough interest in helping our small businesses. I know that my colleagues from every state have heard from their small business owners that they can’t get affordable credit. We need to act decisively now, to get us out of this economic downturn quickly.”
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House Passes Kratovil’s Small Business Tax Relief Proposal
HIRE Act includes Kratovil-authored language to cut taxes on small businesses
Date: 3-4-10 – For Immediate Release
Contact: Kevin Lawlor, 202 225 5311
Washington, DC – Today, the House of Representatives passed a bipartisan jobs package that includes a small business tax relief proposal authored by Rep. Frank Kratovil. The Kratovil proposal, which he introduced last October as the Small Business Property Reimbursement Act, rewards small business owners who make capital investments in their businesses, doubling the maximum tax write-off for the purchase of new capital equipment made in 2010.
“Our number one priority must be getting Americans back to work,” said Rep. Kratovil. “For small business owners who are looking at ways to expand their businesses and hire more workers, this tax incentive will encourage them to make the investment now instead of waiting for the future. Instead of billion dollar bailouts for big banks, this is a smart, market-based approach to encouraging job creation by focusing on small businesses.”
Kratovil’s proposal extends Section 179 of the tax code, doubling the amount small businesses can immediately write off their taxes for capital investments and purchases of new equipment made in 2010 from $125,000 to $250,000. In addition to the Kratovil tax relief provision, the jobs package passed by the House Thursday includes a tax holiday for businesses that hire unemployed workers and an income tax credit of $1,000 for businesses that retain these employees. Additionally, the bill will provide an extension of the Highway Trust Fund that will allow for tens of billions of dollars in infrastructure investment and provisions that will make it easier for states to borrow funds for projects like school and energy construction.
“Instead of bailing out giant corporations, we ought to focus on strengthening the small businesses that support our local economies and drive economic growth. This bill does exactly that,” said Rep. Kratovil. “This package is more critical now given the current economic environment where small business hiring, capital spending and earnings are at record lows.”
Kratovil noted that the bill is fully paid for and will not increase the deficit; the non-partisan Congressional Budget Office has determined that this bill is fully compliant with recently-passed Pay-As-You-Go (PAYGO) requirements. The bill also provides the U.S. Treasury Department with significant new tools to find and prosecute U.S. individuals that hide assets overseas from the Internal Revenue Service and delaying tax breaks on foreign interest payments that have shipped jobs overseas.
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