Note From The Editor: Congress Is Back In Session
House and Senate lawmakers are back in Washington, D.C. this week and have a lot to get done before they head out to continue their campaigning for the November midterm elections. The Senate is expected to vote on two key small business proposals. The first is a vote on amendments addressing the expanded Form 1099 reporting requirement included in the health reform law (see article below).
The second big vote, after much chiding from President Obama, is on the Small Business Jobs and Credit Act. The legislation has gotten tangled up on election season politics and will see a vote in the Senate by the end of this week.
Stay tuned to www.NASE.org for the latest updates on these pieces of legislation.
President Obama Talks Economy And Small Business
President Obama took to his podium to discuss the latest unemployment numbers, where the economy is headed and how small businesses are helping to spur that growth. Here are a few excerpts from the president's speech in relation to small businesses:
- "These proposals include a more generous, permanent extension of the tax credit that goes to companies for all the research and innovation that they do here in America. And I’ve proposed that all American businesses should be allowed to write off all the investments they do in 2011. This will help small businesses upgrade their plants and equipment, and will encourage large corporations to get off the sidelines and start putting their profits to work in our economy."
- "[The Small Business Jobs and Credit Act] is a bill that does two main things: It gives small business owners tax cuts, and it helps them get loans. It will eliminate capital gains taxes for key investments in 1 million small businesses. It will provide incentives to invest and create jobs for 4 million small businesses. It will more than double the amount some small business owners can borrow to grow their companies."
The NASE is pleased that the President and Administration has been promoting passage of the Small Business Jobs and Credit Act. It’s about time policymakers prioritize helping America's smallest businesses -- the self-employed.
In addition, the NASE believes it is important that the Administration and Congress address the individual income tax rates (Bush tax cuts) that are set to expire this year. Many small business owners and self-employed Americans pay taxes on their business income based on the individual income tax rates. If the rates are allowed to expire, many small business owners will receive a tax increase in this ailing economy.
The President remarked that the Administration has cut taxes for small businesses eight times during the past 18 months. Unfortunately, micro-businesses and self-employed receive minimal benefit from the majority of these tax cuts.
To read the transcript of the session, please click here.
NASE Commentary: Legislation Provides Needed Tax Breaks, Funding For Small Business
This piece also appeared in the Washington Post publication, Capital Business.
Last week, President Obama proposed to spur job growth in small businesses through an extension of a tax credit used when they spend money on research and innovation in the United States. While this is a step in the right direction, it will do little to help our constituents -- the self-employed.
Government policy often favors the larger small business, regarding the self-employed merely as people working on their hobbies at home in their pajamas and bunny slippers. But in reality, the self-employed represent 78 percent of small businesses and contribute $1 trillion to the economy.
Congress got it right with the Small Business Jobs and Credit Act of 2010, a bill that would provide needed funding, tax breaks and increased outreach to businesses. The provisions of the legislation have consistently received bipartisan support. However, the bill languished in the Senate in July mostly due to posturing and politics on both sides of the aisle.
As Congress returns from recess, it's time for lawmakers to do for small business what they did for Wall Street. Instead of merely talking about how small business will lead the economy out of the downturn, Congress needs to take action in passing the legislation to give small business the tools and support it needs to recover. By putting off this legislation, lawmakers are turning their backs on the nation's most plentiful job creators and contributors to our economy.
Read the rest of this commentary by clicking here (NASE blog) or here (Washington Post site).
Status: IRS Form 1099 Expanded Reporting Requirement
At odds Tuesday were two amendments, one drafted by a Republican, one a Democrat, to combat the expanded Form 1099 reporting requirement found in the health reform law. Both pieces of legislation were amendments to the Small Business Jobs and Credit Act, which the NASE strongly supports. The key issue is how does the Senate address this very unpopular regulatory burden set to hit small business in 2012.
The amendment of Sen. Mike Johanns, R-Neb., would repeal the provision completely while borrowing money from a preventative care fund and lowering the standard required for the individual mandate to purchase health coverage. The amendment of Sen. Bill Nelson, D-Fla., would modify the expanded reporting requirement by exempting businesses with fewer than 25 employees from having to comply with the new regulation. In addition, it would raise the reporting threshold from $600 to $5,000 of goods and services and create an exemption list of companies that small business owners would not have to issue Form 1099s to, such as public companies and utilities.
After both proposals failed to obtain enough votes for passage, Sen. Mary Landrieu of Louisiana and Chair of the Committee on Small Business and Entrepreneurship agreed to address this important small business issue by introducing separate legislation to be taken up at a later date.
The NASE strongly urges policymakers to address this new compliance burden faced by the small business community. The self-employed and micro-businesses will be particularly disadvantaged should this expanded Form 1099 reporting requirement take effect prior to any mitigating legislation. NASE survey data shows that these businesses will face an over 1250% paperwork increase under the current regulation set to begin in 2012. Please visit the NASE Legislative Action Center to let your members of Congress know you support removing this burden for America's smallest businesses.
Washington Watch Online
Visit NASE Advocacy to view archived editions of Washington Watch. While you’re there, read the latest updates from the Washington, D.C. office, write your Congressperson, and find out how you can join the fight for micro-business.