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Washington Watch - July 8, 2009


Health Care Tidbits

Half of self-employed business owners (55%) said they wish to create an exchange or marketplace which would facilitate the purchase of quality, affordable health coverage. This system would allow small businesses and indviduals to easily compare and purchase the plans of their choice.

Read more stats on the self-employed and health reform here.


NASE Supports Legislation To Help Brand-New Businesses

Senator Jeff Merkley (D-Ore.) recently introduced legislation, endorsed by the NASE, to encourage job creation and support small business owners by cutting taxes for the start-up costs of small businesses.

The Small Business Jump Start Act of 2009 (S. 1402) is cosponsored by Senator Lamar Alexander (R-Tenn.) and is also endorsed by the U.S. Chamber of Commerce and the National Federation of Independent Businesses.

“In this difficult economic time it is imperative that we help our nation’s newest entrepreneurs start their business off right,” said Kristie Arslan, Executive Director of the NASE’s Legislative Office. “The Small Business Jump Start Act of 2009 will greatly assist start-up ventures at the most critical time – their first year of business – and give them the financial boost they need to succeed.”

The legislation will increase the small business start-up expenses deduction from $5,000 to $10,000 and increase the threshold for the deduction phase-out from $50,000 to $60,000.

“As our economy begins to recover, small businesses will lead the way,” Sen. Merkley said in a press release. “One of the best ways we can encourage job growth is to help small businesses through their first year. For the majority of small business owners, the first year is the toughest. New entrepreneurs must hire employees, attract clients, start up administrative systems, and find a suitable facility. By doubling the deduction for start-up costs, this new legislation will encourage the job growth that will get our economy moving again.”

The legislation would increase the number of businesses who can claim the entire $10,000 deduction in the first year. If a new small business has over $60,000 in expenses, the first-year deduction is phased out on a dollar for dollar basis. For example, if a start-up company has $61,000 in expenses, they can take a $9,000 deduction in their first year with the remaining $1,000 spread out over the next 15 years, just as in current law.


IRS Urges Congress To Boost Funds For Taxpayer Services

This week, the House and Senate Appropriations panels are working through the final details of the fiscal 2010 Financial Services spending bills. The Internal Revenue Service (IRS) is funded through these measures. Citing a need to update and expand key IT systems and other infrastructure, the IRS Oversight Board has asked for an additional funding boost of $363 million above the Obama Administration's recommendations.

The Board's proposed increase would allow a budget of close to $12.5 billion. The Administration requested $12.1 billion. Both bodies are in agreement that most of any additional monies should go towards collection activities. In addition to those enforcement activities, the IRS also wishes to increase taxpayer outreach.

“The need for taxpayer service is especially acute during periods of economic hardship, as taxpayers may find themselves facing challenging financial situations,” the board wrote in the report. “In addition, taxpayers need additional help to understand new tax provisions and programs designed to help them during difficult times.”

Last month, the House Financial Services Appropriations Subcommittee approved an additional $4 million for the IRS, which falls just under the maximium bill cost set by the full committee. Senate committees will meet to discuss the bill on Thursday.


Small Biz Health Care Roundup

The health care reform debate is constantly evolving. Here are some of the week’s top health care headlines to help keep you up-to-date on what’s being said:

White House and Hospitals Are Reported to Be Near Deal (New York Times)
The Obama administration and major hospital associations are nearing a deal for about $150 billion in cost savings to help pay for an overhaul of the nation’s health care system. Updated story in Washington Post.

Self-Imposed Health Care Deadline Looms (National Public Radio)
Lawmakers on Capitol Hill are returning to work on efforts to craft a bill to overhaul the nation's health care system. House and Senate leaders have pledged to get health bills passed by both chambers before members leave for their annual summer break next month. However, sometimes Congress acts at its own pace.

White House Open To Deal On Public Plan (Wall Street Journal)
President Barack Obama has campaigned vigorously for a full public option. But he's also said that he won't draw a "line in the sand" over this point.

Health-Care Reform: What It Means for You (Washington Post)
As President Obama and Congress try to overhaul health care, almost every American has a stake. Will you get the care you need? Can you avoid financial ruin? The potential upsides and downsides described below reflect various proposals under consideration.

Wal-Mart Supports Health Care Employer Mandate (CBS News)
Wal-Mart joined with a large union and a liberal think tank to endorse the idea of an employer mandate in health care reform, setting the major retailer apart from most other businesses.



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