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Washington Watch - June 9, 2010
Small Business Creation Act of 2010
Senator Olympia J. Snowe (R-Maine), Ranking Member of the Senate Committee on Small Business and Entrepreneurship, recently sent a letter urging President Barack Obama to invest in American small businesses to grow the economy and create new jobs. Sen. Snowe has introduced the Small Business Job Creation Act of 2010 (S. 3103), which includes provisions to help small businesses create new jobs.
“Given the relatively stagnant unemployment rate, which has hovered near 10 percent since last August, it is evident that our economy requires a significant jolt to prolong a sustained recovery,” wrote Sen. Snowe. “That is precisely why it is imperative we invest in our nation’s small businesses to grow our economy and create new private sector jobs immediately.”
In the letter, Sen. Snowe encouraged the President to ensure that Congress passes a small business job creation bill before the July 4th recess.
The legislation Sen. Snowe introduced includes provisions to continue the increase in Small Business Administration (SBA) lending, boost exporting by America’s small businesses, and provide tax and regulatory relief to the smallest firms.
“As I have repeatedly said, a jobless recovery is not a true recovery,” Sen. Snowe wrote. “And frankly, the unemployment figures released today belie the fact that our nation’s economy still faces an arduous and uphill battle to fully recover from the calamitous effects of the recent recession.”
Sen. Snowe noted that the proposed measures in the Small Business Job Creation Act of 2010 not only align with President Obama’s stated goals for the nation’s economic recovery, but also passed the Senate Small Business Committee with broad, bipartisan support. According to Sen. Snowe, the legislation could help alleviate the uncertainty in the national marketplace and spur the job-creation potential of the 27 million American small businesses.
S Corp Legislation Still In Play In Senate
As previously reported in “Washington Watch,” in NASE Recent News and on the Staff Blog, a package of tax cuts and benefit extensions (H.R. 4213) in consideration before the Senate includes a revenue-raising offset that the NASE and other small business groups would like to have removed.
One particular offset would raise $11.2 by requiring the owners of certain S corporations in fields such as architecture, medicine or law to pay payroll taxes on their share of the company’s profits.
While current law requires that S corporations pay employees reasonable compensation as wages, and that those wages are subject to payroll taxes, profits that go to owners of the companies are not subject to payroll taxes. Supporters of the offset argue that this provides an opportunity for tax evasion.
The provision would affect companies where the skill and reputation of three or fewer employees constitutes the business’s biggest asset. The NASE believes the new provisions should be narrowed, especially since the Internal Revenue Service already has the ability to enforce existing law related to S corps. The Senate is expected to consider the measure before the July 4th recess.
Visit the NASE's Legislative Action Center to tell your Members of Congress that you oppose this legislation.
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