Washington, D.C., February 21, 2012 – The President’s proposed FY 2013 budget request released last week includes several initiatives of interest to the nation’s 22 million self-employed and at least one of the items on the National Association for the Self-Employed (NASE) Self-Employed Agenda.
“The President’s FY 2013 Budget is a step in the right direction, but it must be followed by additional concrete steps to address the specific challenges that make it difficult for self-employed people to start and grow businesses,” explained Kristie L. Arslan, president and CEO of the National Association for the Self-Employed. “The President’s budget request falls short on a critical element of the Self-Employed Agenda: the self-employment tax deduction on health insurance. The time is now for action on this priority which will provide America’s smallest businesses with the same business deduction for health coverage that big business enjoys.”
The President’s budget request includes provisions to help boost self-employed individuals and microbusinesses:
- An Innovation Fund of $200 million to provide early-stage financing of new businesses
- A provision to support community banks including $30 billion in capital outlays
- A doubling of the pension plan start-up credit from $500 to $1,000 per person
- A permanent doubling of the amount of start-up expenditure deductible from $5,000 to $10,000 per year
In addition, the President’s budget request calls for elimination of the alternative minimum tax (AMT), an item on the NASE’s Self-Employed Agenda.
Unfortunately, the budget request to expand the Small Business Health Tax Credit did not address allowing the self-employed to qualify for the credit, denying the benefit to the largest segment of the small business community.
Congressional negotiators last week announced agreement on a one-year extension of the payroll tax, another item on the Self-Employed Agenda. The NASE’s Self-Employed Agenda includes five common-sense tax policy solutions that will help spur economic growth in the self-employed sector of the economy. In addition to the AMT, health insurance and startup deductions and payroll tax extension, it includes simplification of the standard home office deduction.
Arslan added, “We need smart federal policies to encourage new businesses and ensure that America’s self-employed can continue to contribute to the nation’s economic growth.”