Now more than ever we need to give America's small businesses a much needed boost. I was pleased to join a majority of the House in supporting the Small Business Tax Cut Act. This pro-growth proposal will provide every small business that employs fewer than 500 people with a 20% deduction, helping them provide more new jobs.
This key group, small businesses with fewer than 500 employees, has generated 65% of the new jobs in this country since 1995. Yet under the current tax code, small businesses are still faced with enormous burdens that are sapping their capital. Regardless of whether they pay taxes at the corporate or individual level, small businesses can face up to a 35% federal tax rate.
This bill, H.R. 9, will help small business owners retain more capital, invest in their businesses and create more jobs. Under the proposal, small businesses would be allowed to deduct 20% of their income from taxes, and up to 50% of their W-2 wages.
So, whether you are organized as a corporation or you are one of the 75% of small businesses that operate as a pass-through, you will benefit from this new deduction. The non-partisan Joint Committee on Taxation has estimated that H.R. 9 will benefit over 22 million small business employers across the United States reducing their taxes by almost $46 billion. It is also consistent with the budget plan just adopted by the House and was part of the Pledge to America.
In Florida, over 400,000 small businesses employing nearly three million individuals will gain from this tax cut based on 2009 statistics. Major Florida industries which will be helped include the health care and social assistance (421,000 employees), accommodation and food services (363,000 employees) and construction (297,000 employees). These Florida small businesses also include 61,162 which are women-owned and employ 364,319.
This tax cut will help Florida make up much of the lost ground we had during this recession. Consider that from 2005 to 2008, small business created a net total of 134,565 new jobs in Florida but from 2008 to 2009 over 236,367 small business jobs were lost.
We have made some progress. Thanks to our efforts here in the House, small business owners no longer fear the uncertainty cast by Cap and Trade, Card Check, the expansion of Obamacare, or another round of Stimulus that is fueled by more debt and higher taxes. Long-stalled trade agreements were finally passed and American entrepreneurs have an expedited patent and trademark system now in place. Along with a majority of the House, I am working to remove obstacles to economic growth and private sector job creation, reduce the tax burden on families and small businesses and bring down our record national debt.
Member of Congress