With an estimated cost of $ 7 billion over the last 10 years, Congress has passed a package of small business stimulus measures. This should increase tax cuts, spur lending, and provide new equity financing. This bill is in response to the increasing costs of starting a business, and will be overseen by all of the Treasury’s inspector general.
Taxes cut by small business bill
The small business bill is a combined bill that closes tax loopholes and renews tax cuts for small businesses. There would be $ 3.6 billion in tax breaks for any small businesses to be implemented over the next decade. A tax increase on large businesses is how the tax breaks can be paid for. Those with small businesses can deduct startup costs from their taxes. This provision of the bill started as a separate measure in Congress, but is being combined as it is sent to the Senate.
Small businesses to see additional money
The small business lending bill will likely create 3 major avenues for small businesses to get money. First, there would be a $ 30 billion fund of “preferred stock” that banks would be allowed to tap based on their lending to farms and small businesses. There would also be $ 2 billion given to states to help increase state-funded loans to numerous different small businesses. 3rd, the Small Business Administration would be allowed to try and match $ 1 billion of private investment in startups.
Small business bill getting paid for
In order to pay for the estimated $ 7 billion cost of the small business loans bill, the government will most likely be increasing some taxes. Specifically, tax breaks for Grantor-Retained Annuity Trusts will be rescinded. Taxes on the sale of some stock would be increased to the point of standard income taxes as opposed to capital gains taxes.
Vote on the small business bill
The small business bill passed because of a 241-182 vote. The bill is now being combined with the $ 3.6 billion tax-cut bill that is for small businesses and will go to the Senate. The bill is expected to pass the Senate, though not very easily. Some Senate Republicans think that this bill is really “another bank bailout” masquerading as a small business stimulus package. Democrats counter the bill takes a balanced approach to traditional and non-traditional lending for new businesses.
