House Committee on Small Business, Republicans

Straight Talk- House Votes To Give Tax Relief To Small Businesses

Weekly Update from Sam

Dear Friends,

I can’t think of a more appropriate week to evaluate our nation’s tax policies and how they affect small businesses than tax week. On Wednesday, our Committee held a hearing about how upcoming tax increases will affect small firms; specifically, the health care law taxes and the expiring tax rates at the year’s end. What we heard is that small firms need relief now more than ever.

Because small companies are disproportionately affected by tax compliance and high tax rates more than their larger counterparts, the House passed a bill that would provide them relief with a 20% tax deduction. The Small Business Tax Deduction Act is simple, fair, and gives small businesses access to badly needed capital to invest in their companies, while providing a little more certainty to help them plan for the future. This is just the type of a 'jobs' legislation that Washington should focus on, and I encourage the Senate to take up this bill soon.

Finally, I testified during a House Armed Services Committee hearing on Tuesday about including the Committee’s small business contracting legislation in this year’s National Defense Authorization Act. This spring, we introduced contracting reform bills to provide more opportunities for small firms, create protections to fight fraud and abuse, and empower advocates who fight for small businesses during the acquisition process. We will continue to push for these bills to become law so that small businesses can have a fair shot in the federal procurement marketplace.

(signed)
Sam Graves
Chairman

Latest Committee Action

As mentioned above, Chairman Sam Graves (R-MO) held a full Committee hearing, on Wednesday to examine upcoming taxes on small businesses and their economic effect. Specifically, the hearing focused on new taxes and tax increases in the health care law, such as the increase in the Medicare payroll tax and an unprecedented Medicare tax on non-payroll income, as well as the 2001 and 2003 tax cuts that expire at year’s end. Coupled with other burdens, such as high gas prices and inconsistent access to capital, this creates an ominous outlook for small firms.

On Thursday, the Subcommittee on Economic Growth, Tax and Capital Access held a hearing to examine the current regulatory environment for equity finance and ways to strengthen the ecosystem. Equity finance provides not only growth capital, but also strategic partners who are invested in a business’ success. In order to continue small business’s historical role as the engine of our economy, they must have access to capital; unfortunately, there have been regulatory barriers that have limited this access.

Notable Op-Ed

St. Joseph News-Press
Uncertainty from Washington is Holding Back Small Businesses
By Chairman Graves
Sunday, April 15, 2012

News From Washington

As mentioned above, the House passed a 20 percent tax cut for small businesses on Thursday by a vote of 235 to 173. The Small Business Tax Deduction Act would provide tax relief for millions of small businesses, allowing them to invest and hire workers. Through this tax cut, small businesses would be allowed to exclude 20% of their income in determining their taxable income, no matter how they are organized. The maximum deduction can be equal to no more than 50 percent of the W-2 wages paid to employees. This limitation is similar to the limitation in current law for the manufacturers’ deduction (commonly referred to as Section 199). Click here to see Chairman Graves’ floor speech on the bill.

On Wednesday, the House passed an extension of federal transportation authority that would also force the administration to allow construction of the Keystone XL energy pipeline. The bill passed the House by a vote of 293 to 127 and includes important provisions to significantly cut the red tape that delays highway and bridge projects across the country. The bill extends current transportation authority to the end of the fiscal year, and includes amendments shortening environmental reviews of transportation projects. The bill also includes the RESTORE Act, a provision already passed by the Senate directing 80 percent of any penalties paid by BP to the federal government for the 2010 oil spill back to the region.

April 20, 2012