Bill would increase tax deduction for new small businesses; Sensenbrenner votes against taxing AIG bonuses
Bill would increase tax deduction for new small businesses
A new bill to increase the start-up tax deduction for new small businesses from $5,000 to $20,000, is receiving support from the National Federation of Independent Business (NFIB), the nation’s leading small business association.
The Small Business Formation and Job Creation Act was introduced Wednesday by U.S. Reps. Frank Kratovil (D-Md.) and Chris Lee (R-N.Y.).
Susan Eckerly, senior vice president of federal public policy for the NFIB, said, "During difficult economic times, it’s critically important that opportunities for entrepreneurs to start their own small businesses are maximized. We should encourage and provide incentives for these risk takers to take the chance and start their own firms – something the current start-up tax deduction limit of $5,000 fails to do. NFIB thanks U.S. Reps. Kratovil and Lee for recognizing that one of the main roadblocks in starting a small business is funding and cash flow. Most new small businesses face significant start-up costs, including advertising, obtaining licenses, permits and fees, paying rent, hiring business and financial consultants and providing employee training. Under this bill, expenses connected with setting up or investigating the creation of a new business will be deductible up to $20,000 in the first year of the business. This increase in the start-up deduction allowance for new businesses will help new firms survive the challenging and often expensive first year of business."
Many new small businesses are being formed by workers who have lost their jobs and are running out of unemployment benefits.
"NFIB urges Congress to pass this needed legislation that will encourage the creation of new small businesses and lead to job creation. As the nation struggles with the current economic conditions, small business owners, our nation’s job creators, stand ready and willing to lead the country to stronger economic times. Passing this legislation would help small business owners to do just that," Eckerly said.
Sensenbrenner votes against taxing AIG bonuses
Responding to public outrage over bonuses paid to American International Group Inc. executives, the U.S. House of Representatives slammed through a bill late last week that would impose a punitive 90-percent tax on bonuses paid by AIG and other financial companies that receive federal assistance.
The House vote was 328-93.
The bill would apply to bonuses of people receiving more than $250,000 per year. The bill would only apply to payments from companies receiving more than $5 billion from the federal government.
In all, 243 Democrats and 85 Republicans voted "yes" on the bill. The bill was opposed by six Democrats and 87 Republicans.
In the Wisconsin Congressional delegation, seven members voted for the bill: Gwen Moore (D-Milwaukee); David Obey (D-Wausau); Tammy Baldwin (D-Madison); Ron Kind (D-La Crosse); Paul Ryan (R-Janesville); Thomas Petri (R-Fond du Lac); and Steve Kagen (R-Green Bay).
The sole member of the Wisconsin delegation who voted against the bill was Rep. F. James Sensenbrenner (R-Menomonee Falls).
In explaining his vote, Sensenbrenner issued the following statement:
"While this bill may give political cover to those who voted for the stimulus bill which approved the AIG bonuses, it is the wrong way to go about recovering the taxpayers money and ultimately, it will not work. This legislation was put forth by the Democrats to cover up the fact that they are the ones who inserted the provision into the stimulus bill that authorized the payment of these bonuses to AIG and then called for a vote before anyone could read the 1,000 page bill. It is only a matter of time before this bill is declared unconstitutional and overturned by the courts because of the bill of attainder. A bill of attainder is prohibited by Article I, Section 9, Clause 3 of the Constitution because it deprives those individuals being singled out for punishment the right to a trial. Essentially, this means taxpayers will not recover this bonus money. To add insult to injury, it may even cost taxpayers more money because of the likely litigation expenses and court fees that will result from this legislation. The smarter and more effective way to actually recoup this bonus money would be for Treasury Secretary Timothy Geithner to petition to put AIG into receivership. This would enable courts to void contracts that date back up to one year. Voiding these contracts would be a much more efficient and successful method to put the taxpayer money back into the taxpayer’s pocket, and I call upon Secretary Geithner to do this immediately. Today’s vote is another example of how haste makes waste. The American people deserve better from the Democratic House Majority."