With an estimated cost of $ 7 billion over 10 years, Congress has passed a package of small business stimulus actions. This should be able to spur lending, increase tax cuts, and provide new equity financing. This bill is in response to the increasing costs of starting a business, and can be overseen by all of the Treasury’s inspector general.
The Small business bill helps cut taxes
The small business bill is a combined bill that closes all of the tax loopholes and renews the tax cuts for small businesses. There would be $ 3.6 billion in tax breaks for small businesses to be implemented over the next decade. A tax increase on large businesses is how the tax breaks will be paid for. Small businesses would also be able to deduct startup expenditures from their taxes. This provision of the bill began as a separate measure in Congress, but is being combined as it is sent to the Senate.
Additional money to flow to small businesses
The small business lending bill would 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 any of their farms and small businesses. There would also be $ 2 billion given to states to help increase state-funded loans to many different small businesses. 3rd, the Small Business Administration would be authorized to match $ 1 billion of private investment in a whole bunch of 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 probably be increasing some taxes. Specifically, tax breaks for Grantor-Retained Annuity Trusts – which are really trusts set up to stay away from taxes on gifts — can be rescinded. Additionally, 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
On a 241-182 vote, the small business bill passed. The bill is combined with the $ 3.6 billion tax-cut bill for small businesses and will go to the Senate. The Senate is expected to pass the bill. . Democrats counter that the bill takes a balanced approach to traditional and non-traditional lending for all of the new businesses.
