Today, Congressman Tom Perriello voted again to cut taxes on small businesses and to help provide capital so they can hire and expand. The Small Business Jobs Act, which is fully paid for, enacts $12 billion in tax cuts so that owners can invest in their small businesses. The bill also helps meet capital needs by creating a $30 billion lending fund for community banks that could leverage up to $300 billion in private investment in small businesses. Unlike the big bank bailout of 2008, which Perriello opposed, this proposal rewards responsible actors and directs lending to where it is needed most: small businesses on Main Street.
"This was a huge victory for small business that included much needed tax cuts and a boost to small business lending. After meeting with business owners throughout our area, we helped to craft this common-sense approach that includes a freeze on capital gains taxes and a significant increase in the deduction for start-up costs," said Rep. Perriello. "Sadly, today also showed the partisanship and hypocrisy the American people are tired of seeing in Washington. House Republicans stand with small business for photo-ops but refuse to stand with them on one of the biggest pieces of small business legislation in a decade. In these brutal economic times, there are those focused on solving problems and those focused on scoring cheap political points. I am proud to stand with the problem solvers and to stand with small business."
The Small Business Jobs Act gives small businesses approximately $12 billion in tax cuts to spur investment, growth, new starts and hiring, including two tax cuts that were initially cosponsored by Rep. Perriello. These include:
Elimination of capital gains taxes on key investments in small businesses (Initially co-sponsored by Perriello;)
* The highest small business expensing limit ever-- up to $500,000;
* An extension of 50% bonus depreciation originally enacted by the Recovery Act;
* A new deduction for health care expenses for the self-employed;
* Tax relief and simplification for cell phone deductions;
* An increase in the deduction for entrepreneurs' start-up expenses (initially co-sponsored by Perriello;)
* A five-year carryback of general business credits;
* Limitations on penalties for errors in tax reporting that disproportionately affect small business.
The Small Business Jobs Act also creates a $30 billion loan fund that will help meet small businesses' capital needs through community banks. Under the bill, small- and medium-sized community banks (assets of $10 billion or less) who participate in the lending fund will be subject to tough new performance-based incentives to make sure they are lending to small businesses. If they increase small business lending, their rate for repaying the government will drop; if, however, they reduce small business lending, their rate rises. The Congressional Budget Office estimates that the lending fund will save taxpayers $1 billion over 10 years, as banks are expected to pay back these funds over 10 years with interest.
In addition to these cuts, small businesses that provide health care for their employees are currently eligible for tax credits of up to 35% of the costs of their premiums as part of the health care reform law. The American Recovery and Reinvestment Act also included over $86 billion in tax cuts for American Businesses.
During Rep. Perriello's term, 123 businesses in the 5th district have received approximately $77 million in capital to meet their needs and help them grow and hire. This includes $22.9 million from the Small Business Administration.
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