Senate Bill Frees Capital for Small Business Job Creation and Expansion; Increased Expensing Part of Bush Small Business Agenda

4/8/2002

From: John McDowell of SBA, 202-205-6941, e-mail: john.mcdowell@sba.gov

WASHINGTON, April 8 -- Small businesses will have additional funds available for job creation and expansion if they are able to expense more of their capital purchases, said Thomas M. Sullivan, Chief Counsel for Advocacy, in a recent letter to members of the U.S. Senate. The letter to Senators Kit Bond (R-Mo.), Susan Collins (R-Maine), Tim Hutchinson (R-Ark.), and Gordon Smith (R-Ore.) was sent in support of their co-sponsorship of Senate bill S. 2023, which would increase expensing limits for small businesses.

"Your effort to expand the provisions of section 179 of the Internal Revenue Code has the strong support of the small business community," Sullivan wrote. He continued that the bill "improves businesses' ability to retain and accumulate capital for growth." He also pointed out that "A number of small business groups with whom we work strongly support the bill, particularly the delegates to the 1995 White House Conference on Small Business."

Increased expensing (allowing businesses to write off purchases immediately, rather than over time) has gained recent support, as it has become one of the essential items in President Bush's small business agenda. As noted in the agenda, high tax rates inhibit entrepreneurial activity by acting as a tax on success, claiming a larger share of income from flourishing enterprises, while the government shares little of the risk of loss. For most entrepreneurs, taxes reduce their companies' cash flow -- the money businesses need to expand, buy more equipment, and hire more workers.

Increased expensing helps to slow this trend, ensuring continued innovation, and leaving as many resources as possible with the entrepreneurs who are generating new ideas, better jobs, and greater wealth.

According to Advocacy's research, small businesses create seventy-five percent of the net new jobs and employ more than half of the private work force. Policy initiatives that support small businesses, such as increased expensing, can help them in this job creation role.

For more information, visit the Office of Advocacy website at http://www.sba.gov/advo.

Created by Congress in 1976, the Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The Chief Counsel for Advocacy, who is appointed by the President and confirmed by the U.S. Senate, directs the office. The Chief Counsel advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. Issues are identified through economic research, policy analyses, and small business outreach. The Chief Counsel's efforts are supported by offices in Washington, D.C., and by Regional Advocates. For more information on the Office of Advocacy, visit http://www.sba.gov/advo, or call 202-205-6533.