As we celebrate small business week this week, let's take the time to recognize just how important our small and family owned businesses are to our communities. Small businesses are the engine of our economy, creating two out of every three jobs right now. In Wisconsin, over 447,000 small businesses, including 340,000 self-employed individuals, are critical to not only our local economies but our state's economy as well.
Unfortunately, many of our small businesses were hit hard and are continuing to struggle in an improving but still very tough economy. Credit markets have been tight and consumers have been thrifty. The economy is turning around but it's taking time. As many small businesses gain confidence and access new resources, they are driving our economies and improving conditions in our towns and communities.
I know how important it is to listen to these local businesses and continue to support their needs. That's why I've authored the following legislation to help businesses increase efficiencies and grow as well as help them save and plan for the future.
The S Corporation Modernization Act (H.R. 1478)
*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. This bipartisan bill fixes this unfair penalty by adjusting the tax code to allow S corporations to liquidate unproductive assets after five years -- reducing the overall tax burden and freeing up capital to be grow and create new jobs.
Rural Microbusiness Investment Credit Act
*This bill helps generate investment in both start-up and expanding rural microbusinesses. It provides a 35% federal tax incentive to entrepreneurs who invest in their businesses and is specifically targeted to entrepreneurs operating in economically distressed rural areas.
Small Businesses Add Value for Employees (SAVE) Act (H.R. 1534)
*Many small businesses do not offer a 401(k) or similar retirement savings plan because of the complexity, cost, and liability of sponsorship. The SAVE Act 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.
The Promotion and Expansion of Private Employee Stock Ownership Act (H.R. 1244)
*Congress created the S corporation employee stock ownership plans (ESOP) structure to encourage and expand retirement savings, giving more workers the opportunity to own their companies through an ESOP qualified retirement savings program -- creating retirement security for millions of U.S. workers. This bill eliminates barriers businesses currently face in establishing a new S corporation ESOP or expanding the employee-ownership stake in an S corporation.
I've also authored a bill to permanently reduce farm equipment depreciation, H.R. 1747. Updating the current tax code, by changing the current depreciation schedule for agricultural equipment from seven to five years, will aid rural development, support American manufacturing, and improve farm safety. Since many finance equipment for five years, the bill will help famers more easily manage debt and better facilitate machinery replacement. As the leader in agricultural equipment production, a five-year depreciation schedule will also boost domestic demand help keep these jobs in the U.S.
These bills are just a start but are important to giving small businesses and family farmers the support they need to weather this economy and continue to grow and hire. Small business owners, family farmers, and entrepreneurs in Wisconsin are leaders in innovation and technology. They are the engines of our communities and are vital to our way of life. I want to make sure that our small businesses are provided every opportunity to succeed so they can continue to serve as an important source of employment and an anchor to our local communities.