Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) and Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu (D- La.) today released the Small Business Jobs Act, a bill to 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. “Our bill will 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.”
The Small Business Jobs Act will:
Help Small Businesses Access Capital
• 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.
• This 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
• The legislation 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.
• 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 increases 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.
• This 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.
• This legislation establishes the State Export Promotion Grant Program (STEP), which would increase the number of small businesses that export.
• This 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.
• 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.
• This 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.
• This legislation makes clear that no single contracting program receives priority over another program when competing for federal contracts.
The legislation is fully paid, closes unintended tax loopholes and reduces the tax gap.
A more detailed summary of the provisions in the Small Business Jobs Act can be viewed by clicking here.
Text of the Small Business Jobs Act can be found by clicking here.