July 1, 2009
July 1, 2009
US Senator Jeff Merkley Press Release,
Lake Oswego, OR – Oregon’s Senator Jeff Merkley announced today at a meeting of Clackamas County Chambers of Commerce that he will introduce the Small Business Jump Start Act to encourage job creation and support small business owners by cutting taxes for the start-up costs of small businesses. Merkley’s Small Business Jump Start Act is cosponsored by Senator Lamar Alexander (R-Tenn.) and endorsed by the U.S. Chamber of Commerce, the National Federation of Independent Businesses (NFIB), and the National Association for the Self-Employed.
“As our economy begins to recover, small businesses will lead the way,” Merkley said. “One of the best ways we can encourage job growth is to help small businesses through their first year. For the majority of small business owners, the first year is the toughest. New entrepreneurs must hire employees, attract clients, start up administrative systems, and find a suitable facility. By doubling the deduction for start-up costs, this new legislation will encourage the job growth that will get our economy moving again.”
Small businesses are a vital part of America’s economy. They employ approximately half the private workforce and, in rural America, comprise nine out of ten businesses.
Small business formation increases during periods of high unemployment. Over the last decade, small businesses have generated 60 to 80 percent of net new jobs annually.
The Small Business Jump Start Act of 2009 will:
* Give small businesses a financial boost in their first year, encouraging them to open their doors and create jobs now, instead of waiting for the economy to recover;
* Increase the small business start-up expenses deduction from $5,000 to $10,000; and
* Increase the threshold for the deduction phase-out from $50,000 to $60,000.
Increasing the threshold for the deduction phase-out for start-up costs from $50,000 to $60,000 widens the pool of businesses who can claim the entire $10,000 deduction that first year. If a new small business has over $60,000 in expenses, the first-year deduction is phased out on a dollar for dollar basis. For example, if a start-up company has $61,000 in expenses, they can take a $9,000 deduction in their first year with the remaining $1,000 spread out over the next 15 years, just as in current law.
“NFIB thanks Senator Merkley for his leadership on this issue,” said Susan Eckerly, NFIB senior vice president. “Funding and cash flow are often one of the main roadblocks in starting a new business. By passing the Small Business Jump Start Act of 2009, Congress would help ease the financial burden facing many new small business owners during their expensive first years in business. NFIB looks forward to working with Senator Merkley to get this needed legislation signed into law.”
“A robust small business community is a vital component to America’s economic recovery. Allowing small business owners the opportunity to expense additional start-up costs up front would foster more entrepreneurial activity and further encourage the important role of small business as the job producers in our economy,” said R. Bruce Joston, Executive Vice President, U.S. Chamber of Commerce. “As a longstanding advocate of tax relief for small businesses, the U.S. Chamber of Commerce applauds Senator Merkley’s leadership on introducing the Small Business Jump Start Act of 2009.”
“In this difficult economic time it is imperative that we help our nation’s newest entrepreneurs start their business off right. The Small Business Jump Start Act of 2009 will greatly assist start up ventures at the most critical time — their first year of business — and give them the financial boost they need to succeed,” said Kristie Arslan, Executive Director of the National Association for the Self-Employed.
This bill will help out small business owners like Jack and Giovanina Giaccarini who started Adaptive Technology Assistance in Grants Pass. Their company provides products and services that make homes more accessible and functional for the disabled. Jack and Giovanina started their business in 2007 and, like many entrepreneurs, had a tough time securing new capital. But they stuck to their plan, made smart decisions, and are already making a profit this year.
“Senator Merkley’s plan to help small businesses will provide a major incentive for folks looking to start a business in this economy,” said Giovanina Giaccarini. “A first-year tax deduction can help new businesses purchase equipment and set up shop right out of the gate. The sooner a business can get up to speed, the more likely they are to become a long-term contributor to their community.”