TAX NEWS - June 2010

Business Tax Relief: Businesses to Spur Job Creation

Deficit-Neutral Legislation Will Provide Small Business Tax Relief

Washington, 18 Jun 2010 -- Yesterday, Rep. Bill Foster (IL-14) voted for the Small Business Jobs and Credit Act, and earlier this week, he voted for the Small Business Tax Relief Act. Together, these bills cut taxes for small businesses while giving them the credit they need to hire more employees.

"As a former small businessman, I have created jobs, made payroll and provided benefits, but without a line of credit, a business can't grow, sell more products or create more jobs" said Foster. "I voted for these bills because I have talked to small business owners who are frustrated that during these tough times, they can't get access to the money that they need to succeed."

H.R. 5486, the Small Business Jobs Tax Relief Act, will provide targeted tax relief to small businesses, helping them to continue to survive the current economic climate while also providing carefully calibrated incentives to expand their businesses and create jobs. For example, the bill increases the deduction for start-up expenditures from $5,000 to $20,000. The bill also increases the exclusion of small business capital gains from 50 percent to 100 percent, for gains worth up to $10 million.

H.R. 5297, the Small Business Jobs and Credit Act, delivers loans to small businesses in order to promote further economic recovery and create jobs. The bill creates a new $30 billion small business lending fund for small and medium sized community banks ($10 billion or under) that could potentially leverage up to $300 billion in lending.

"The near-collapse of our financial system has made it exceedingly difficult for small businesses to get the credit they need," said Foster. "By passing this legislation, community banks will have incentives to lend to small businesses, allowing these small businesses to grow and hire additional employees."

Together, this package of legislation is fully paid for by closing tax loopholes, and it will not add to the deficit. In fact, according to the Joint Committee on Taxation, it is projected that the bills will reduce the deficit by more than $3 billion over 10 years.