WASHINGTON — Sen. Chuck Grassley (R-Iowa) has introduced a bill designed to strengthen small businesses by lowering their tax burden. The senator says that the bill will help create new jobs, since about 70% of all net new jobs come from small business.
“My bill will leave more money in the hands of small-business owners so they can hire more workers, keep paying the salaries of their employees, and make additional investments that will lead to new jobs,” Grassley says. “If we raise taxes on the one segment of the economy that creates the majority of new jobs, we’ll be in even worse economic shape than we are now.”
While many of the provisions included in Grassley’s Small Business Tax Relief Act of 2009 seem geared toward larger small businesses with annual revenues approaching $50 million, the bill also includes provisions that would increase the amount of capital expenditures that small businesses could deduct from $250,000 to $500,000. This is designed to encourage businesses to invest in new equipment, Grassley says.
In addition, the bill would prevent businesses with less than $2 million in taxable income from facing graduated tax increases.
It also extends the one-year carryback for general business credits to a five-year carryback for small businesses, offers a 20% deduction for flow-through business income for small businesses, and expands the net operating loss (NOL) provision contained in the current stimulus bill, among other things.
“I hope this bill gets bipartisan support,” says Grassley. “Job creation is a bipartisan issue and really should be a non-partisan issue.”