BREAK IN TRANSCRIPT
Ms. SNOWE. Mr. President, I rise today to introduce legislation that will boost America's small businesses and help them escape unnecessary regulations that are stifling creativity, growth, and job creation. This legislation will encourage small businesses to invest and hire, giving the economy a much needed lift.
Two of the most vital issues looming over small business job creators are tax and regulatory uncertainty. This bill aims to, among other things, deliver targeted tax relief to small businesses with eight different tax provisions, and protect small businesses from burdensome regulations. The Restoring Tax and Regulatory Certainty to Small Businesses Act of 2012 will provide small business owners and entrepreneurs with the confidence they need to expand, thrive, and prosper in today's insecure economy.
My friend and colleague, Small Business Committee Chair Landrieu, recently proposed a small business relief act with some similar measures. However, Chair Landrieu's bill lacks many of the tax and regulatory reforms that small businesses are seeking. While her bill does contain some measures that I support, and which I have worked with her to include in a freestanding bipartisan small business jobs bill, it does not include any provisions to protect small businesses from arduous regulations. Additionally, it omits tax provisions that were included in our joint bill, S. 2050, that need to be addressed. By and large, this bill has some merits and I commend Chair Landrieu for pressing forward the national conversation on these critical issues, but the bill I am introducing today goes further by including both regulatory, and additional tax relief for small businesses.
The Restoring Tax and Regulatory Certainty to Small Businesses Act includes eight indispensable tax extenders that will provide targeted tax relief to small businesses and extend the essential tax relief provisions that were included in the bipartisan Small Business Jobs Act of 2010, P.L. 111-240. We have endured more than 40 straight months of unemployment over 8 percent and have yet to see changes implemented to ease the burdens on job creators. With this bill, the Nation's small businesses, which create at least two-thirds of all new jobs, will finally enjoy tax relief in many different forms.
Small businesses should be rewarded for taking risks and increasing investments. Under this bill, the 100-percent capital gains exclusion will be extended, as will the availability of Section 179 expensing, which gives businesses the option of writing off the cost of qualifying capital expenses in the year of acquisition in lieu of recovering these costs over time through depreciation. Additionally, the carryback of general business credits to offset 5 years of taxes as a cash-flow tool for businesses that are currently not realizing profits will be extended, giving small businesses even more funds to put toward future endeavors.
Prior to the enactment of the Small Business Jobs Act, taxpayers could generally only claim allowable general business credits against their regular tax liability, and only to the extent that their regular tax liability exceeded their alternative minimum tax--AMT--liability. With this bill, qualified small businesses will now be able to reduce their AMT liability for general business credits by allowing credits to be applied against regular income tax and AMT liability.
Additionally, this bill will permit contractors that do not complete contracts within a single year to benefit from bonus depreciation. Another provision was designed to benefit businesses that were initially C corporations, but elected to be taxed as S corporations and had net built-in gains when they made the S corporation election. Under this bill, small businesses will also be able to deduct more for startup costs, and be able to deduct health insurance
premiums against payroll taxes, both of which are significant matters to new and developing small business owners. Thanks to these new tax provisions, business owners will be empowered to increase participation in domestic and global markets.
Besides these critical tax provisions, the bill also provides real, meaningful
regulatory relief for job creators. Since the enactment of the Small Business Regulatory Enforcement Fairness Act of 1996, P.L. 104-121, more than 50,000 new rules have gone into effect, each with an estimated impact of more than $100 million annually. More than 3,000 new Federal rules are established each year. And alarmingly, small firms with fewer than 20 employees bear a disproportionate burden of complying with Federal regulations. These small firms pay an annual regulatory cost of $10,585 per employee, which is 36 percent higher than the regulatory costs facing larger firms. This bill will strengthen existing laws and enable the SBA Office of Advocacy to protect small businesses from these burdensome regulations.
The Restoring Tax and Regulatory Certainty to Small Businesses Act incorporates the latest version of the Freedom from Restrictive, Excessive, Executive Demands and Onerous Mandates, FREEDOM, Act--a necessary, targeted regulatory reform bill that will provide small businesses with much needed relief from onerous, one-size-fits-all Federal regulations. These provisions would: (a) require agencies to consider foreseeable indirect costs of rules; (b) increase the number of small business review panels charged with helping agencies better consider small businesses during the rulemaking process; (c) add teeth to the existing requirement that agencies regularly review the regulations on their books to determine if they are outdated or needlessly burdensome; and (d) allow small businesses to seek judicial review during the proposed rule stage, concerning whether an agency complied with its legal obligation to conduct an economic impact analysis with the rulemaking. Regrettably, current law does not allow small businesses to challenge this in court until after a burdensome rule is finalized, when it is already too late.
A recent survey of 500 small business owners along the east coast found that 71 percent of employers plan to maintain current employee levels and only 21 percent plan to hire one or two more workers in the near future. Business owners are reluctant to hire because of the sluggish pace at which the U.S. economy is recovering, the uncertain fiscal future, and the overly burdensome regulations currently in existence. The NFIB reported that small business optimism is also at its lowest level since October 2011. Now is the time to reverse these trends and give small businesses, our one bright spot of job creation, the certainty and motivation they need to grow and provide more jobs.
BREAK IN TRANSCRIPT