Entrepreneurs play a host of unique and integral roles in the American business world. They are catalysts for innovation. They are engines of job growth. And, perhaps most importantly, they are agents of economic turnaround. During past recessions, small businesses have led the charge towards financial recovery. Today, in the face of soaring inflation and stagnating salaries, we clearly need their help to bring the market back on track. But in order for this to happen, entrepreneurs must have the tools necessary for growth.
Targeted tax relief is an important means for encouraging small business development. By promoting investment and research, it spurs entrepreneurial expansion and economic progress. In today's hearing, we are going to look at a number of specific incentives that do just that.
Many of the items we are reviewing today were contained in the Economic Growth and Tax Relief Reconciliation Act of 2001, passed during President Bush's first term. For budgetary reasons, these incentives were established on a temporary basis. In order to continue to further small business growth, they will have to be extended.
In moving forward with this task, it is important to focus on those tax breaks that galvanize the job market and bolster emerging industries. Incentives for tech startups would accomplish that goal. After all, innovation has long been a springboard to economic recovery. For example, the dotcom boom of the mid 1990's pulled us out of decline and breathed new life into the American marketplace. Today, we need to tap that same spirit of innovation. Tax breaks that incentivize tech startups would drive millions of dollars into the economy and create hundreds of thousands of new jobs. With unemployment at its highest point in 5 years, we could use that kind of boost to the workforce.
Flexible depreciation schedules present another crucial incentive for entrepreneurs. These provisions encourage small firms to invest in their own growth and development. If business owners are willing to make capital investments, it only makes sense to provide them with the motivation to do so. This particular impetus not only bolsters small firms, but also puts cash back into the economy. Every small business purchase of a good or service gives a needed lift to the industry that provides it.
Targeted relief does more than advance entrepreneurial development. It also promotes investment in our communities. The benefits of incentives that encourage financiers to put money into small firms in low-income neighborhoods are twofold. These provisions both open up new markets and revitalize struggling regions. Tax breaks that bring jobs and capital to low-income communities would be a tremendous boon to the small business world, and the economy as a whole.
These kinds of incentives, coupled with a number of other items we will look at, present an important means for revitalizing the marketplace. Small firms are the engine that drives American commerce-- When they do well, we all do well. Extending the provisions discussed today would give them the security they need in order to grow, and the certainty they need in order to help strengthen and expand our economy.