Small businesses are the engine of America's economy, representing more than 95% of all employers. They are responsible for 50% of our gross domestic product and are creating 2 out of every 3 new jobs according to the Small Business Administration (SBA). In Wisconsin, over 447,000 small businesses, including 340,000 self-employed individuals, contribute enormously to our state economy and communities.
Unfortunately, these are tough times for small businesses in every corner of the country. The current recession and resulting credit crunch is making it difficult for small businesses to meet basic requirements, such as making payroll, keeping the shelves stocked, and purchasing the necessary materials for manufacturing. As a member of the tax writing House Committee on Ways & Means, I have introduced a number of commonsense proposals to help Wisconsin small businesses compete by giving them the tools and incentives to grow and create jobs.
I consistently hear that access to credit is the number one challenge for our small businesses. That's why in December 2009 I sent a letter to U.S. Department of Treasury Secretary Timothy Geithner asking him to institute new programs to unlock small business credit. Since that time, the Treasury Department announced a proposal to loan small banks $30 billion as an incentive to offer credit to small businesses and the House passed the Small Business Jobs and Credit Act (H.R. 5297) to create such a program. I strongly support legislation that helps local community banks provide loans to small businesses at reasonable costs.
Small Business Resource Center
I also recently launched an online Small Business Resource Center that provides information and links to resources about current legislation affecting small businesses, new tax benefits, the impact of the new health care reform bill, and financial information as well as other tools. The online portal connects small business owners and employees with useful resources to promote growth and stability.
Small Business Agenda
Creating new jobs and meaningful investments in western Wisconsin is my top priority. For this reason, I've authored and worked on legislation to do just that, including:
Modernizing Small Business Rules
There are 59,000 registered S-Corporations operating in Wisconsin. These small, family run businesses are taxed twice on assets they sell in the first 10 years of operation. In order to fix this unfair taxation, I recently reintroduced S-Corporation Modernization Act. This legislation would preserve the continued success of these companies by adjusting the tax code to increase these businesses access to capital. This would make it easier for existing businesses to convert to S-Corp Status.
I have also worked to help small businesses by authoring legislation to ease the payment schedule of taxes for small and medium firearm manufacturers. This simple fix, which was signed into law in July 2010, updates the tax payment process and ensures that these small businesses do not have to take out a loan to pay their taxes.
Providing Retirement Opportunities for Employees of Small Businesses
Currently, many small businesses do not offer a 401(k) or similar retirement savings plan because of the complexity, cost, and liability of sponsorship. In response to this problem, I introduced the Small Businesses Add Value for Employees (SAVE) Act, which would improve existing SIMPLE IRA and SIMPLE 401(k) retirement plans to make it easier for small businesses to offer savings plans to their employees.
Affordable Health Care
Many small businesses and family farmers are not able to afford health care coverage for their families or their employees. Health care reform will give small businesses access to quality insurance options and provide tax credits to help make the coverage affordable.
Beginning in 2014, health care reform creates state-based Health Insurance Exchanges, based on legislation I authored called the SHOP Act, to make health insurance affordable and accessible for family farmers, small business owners and individuals without employer-based coverage. By being given the ability to join a large purchasing pool, small businesses will now have access to the same types of quality, affordable coverage that only large firms have today.
Small businesses will be able to do one-stop comparison shopping for transparent, affordable insurance plan that offers:
* Lower rates that currently only large groups and firms get
* Stable pricing from year to year
* Lower administrative costs
* A choice of quality plans
Beginning immediately in 2010, health care reform also provides tax credits for small businesses and family farmers to help them offer employees coverage,. Right now, tax credits of up to 35% are available to cover the cost of employee health plans. That tax credit will be worth up to 50% of health plans costs for small business employees starting in 2014.
Helping Rural Business Prosper
During our last recession, between 2000 and 2003, nationwide employment grew in microenterprise 9.17% while falling 1.8% in larger firms. I introduced the Rural Microbusiness Investment Credit (H.R. 5990) to generate investment in both start up and expanding rural microbusinesses by providing a 35% federal tax incentive to entrepreneurs who invest in their businesses. This is critical for businesses in the midst of recession that need assistance in making critical investments. The credit is specifically targeted to entrepreneurs who are operating businesses in economically distressed rural areas where access to capital has always been a challenge and is even more difficult with the recent decline in bank lending to small businesses.