Washington Watch - December 10, 2009

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Washington Watch - December 10, 2009

Micro-Businesses Attend Kickoff Of "White House To Main Street" Series

Micro-business owners in Allentown, Pennsylvania recently got a visit from President Barack Obama for the opening of the White House To Main Street tour. The Allentown stop was the first in a series of events across the nation focusing on job creation.

“Now, it’s typical that it takes time for job growth to catch up with economic growth. And it’s typical that it takes a little more time to come out of a recession when it comes to hiring. But Americans who’ve been desperately looking for work for months -- some of them maybe for a year or longer -- they can’t wait. And we won’t wait. We need to do everything we can, right now, to get our businesses hiring again so that our friends and our neighbors can go back to work,” said President Obama.

Dale Schaffer of Bethlehem, Pa. is the co-owner of Elysian Fields Specialty Florals. He was part of a group of NASE members that were invited by the Obama Administration to attend the event at Lehigh Carbon Community College in Allentown:

“As a small business owner, I would have liked to learn more about opportunities for grants and small business loans. The bank situation is very discouraging when you rent or lease a property for your business and have very little credit to show when approaching a lending institution for any financial backing. I would love to grow our business and have the opportunity to employ more people, but the current financial stress prohibits that at this time. Our goal is to maintain the current number of employees we have while also looking to the future with hope of growth and expansion,” commented Mr. Schaffer.

The self-employed represent approximately 78% of all small business in the United States and have consistently grown each year despite the ailing economy. The NASE asserts that any effort by the Administration and Congress to increase job creation needs to have a substantial focus on self-employment as a viable career option and the self-employed as job creators in our nation.

According to a November 2008 NASE online poll, 71% of micro-business owners reported that the slow economy was having a moderate to significant impact on their business. Click

here for full survey results.


House Passes Bill To Hold Estate Tax At 2009 Levels

The House recently passed a bill (H.R. 4154) that would fix the estate tax at current levels. The measure, which passed 225-200, would make permanent this year’s $3.5 million-per-person exemption and 45 percent tax rate on estates.

While the legislation does not allow for the exemption to be indexed for inflation, it does include the text of a bill (H.R. 2920) that would legally require pay-as-you-go budget rules.

If Congress does not pass new legislation, the estate tax will vanish for one year (starting January 1, 2010). The estate tax will then return to its 2001 schedule. The 2001 schedule includes a higher tax rate and lower exemption amount than schedules of recent years.

Most lawmakers oppose a one-year repeal, and supporters of maintaining an estate tax in some form note that it would be very difficult to restore the tax once it was eliminated.

All Republicans and 26 Democrats opposed the House bill, arguing that it did not go far enough to scale back the tax.

Senate Majority Leader Harry Reid (D-Nev.) has discussed the bill with House Speaker Nancy Pelosi (D-Calif.) and House Majority Leader Steny Hoyer (D-Md.). However, Sen. Reid has indicated that it may be difficult to find time to discuss a separate bill because of the current health care debate in the Senate, making it more likely that a temporary fix will be included in a year-end bill.

NASE National Tax Advisor, CPA To Congress: Support Extending Tax Incentives For Small Biz

When appearing before Congress, NASE National Tax Advisor and Certified Public Accountant, Keith Hall, has one piece of advice for lawmakers – in order to continue growing and creating jobs, small businesses need to be able to count on a number of tax incentives. Mr. Hall was invited to disclose the needs of the self-employed business owner at a recent roundtable on expiring tax provisions, hosted by the Senate Committee on Small Business & Entrepreneurship.

The National Association for the Self-Employed (NASE) is strongly in support of extending tax incentives that are currently scheduled to expire. In particular, the NASE supports extending the provisions for Alternative Minimum Tax increased exemption amounts, bonus depreciation options, section 179 limits, the sales tax deduction option, the first time home buyer’s credit, and 15 year cost recovery for certain qualified leasehold improvements and five year recovery for farming business machinery and equipment.

“Many of those provisions were enacted over time by Congress to stimulate business and job growth and have been successful particularly for small businesses across the country,” commented Mr. Hall. “Congress certainly could not have anticipated the economic crisis that we all are currently facing, however, now is not the time to end key tax incentives that have contributed to the creation of new jobs.”

Hall recommended that Senate lawmakers not only approve temporary tax incentives for 2010, but also make them permanent, as temporary tax provisions can make for difficult tax planning for the self-employed. He also suggested that Congress pass legislation that would offer the self-employed the option of a standard home office deduction, as well as the opportunity to write off their health costs as a business expense.

The Joint Committee on Taxation has provided a list of over 25 major tax incentives that are scheduled to expire in 2009. There are also over 85 temporary tax incentives that have been extended from year to year that are scheduled to expire or “sunset” by the end of next year.



Small Biz Health Care Roundup

Here's a list of other top headlines related to the self-employed and the health care debate. If you see something we forgot to include, drop us a line at media at nase dot org.

  • Senate Continues Health Reform Debate, Dems Emphasize Patient Protections (RTT News) - "Frustrated with insurance industry practices of dropping or denying coverage for those with expensive diseases, Sen. Debbie Stabenow, D-Mich., said the Democrats' reform bill would put in place important protections."
  • Profiles: How Could Health Reform Affect You? (PBS Newshour) - "A young woman without health insurance. A small business owner. A woman just diagnosed with breast cancer. The PBS NewsHour talks to health policy analysts about how health care reform could affect these individuals and other real people."
  • CBO: Senate Bill Won't Change Small Biz Premiums (BizJournals.com) - "Premiums for individuals who buy insurance through the exchanges created by the legislation would be 10 percent to 13 percent higher on average than they would be in 2016 under current law, CBO found. That's because insurance policies in the exchanges would pick up a larger share of an individual's health care costs and cover services, such as prescription drugs, that often are not covered by current individual policies."
  • Obama Says Health Care Reform Means Jobs (USA Today) - "Obama told a town hall gathering in Allentown, Pa., on Friday that health care reform is "part and parcel" of what has to be done to help the economy."
  • Harry Reid: Democrats Reach 'Broad Agreement' (Politico) - "Democrats on Tuesday night took a major step forward on a plan by agreeing to ask congressional scorekeepers to give them cost estimates on a possible compromise that would break the impasse over health reform in the Senate."



"Frustrated with insurance industry practices of dropping or denying coverage for those with expensive diseases, Sen. Debbie Stabenow, D-Mich., said the Democrats' reform bill would put in place important protections."

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