• Major Tax Relief Passed in 2001 Puts Money Back in the Pockets of the Self-Employed

• NASE Participates in Association Health Plan Forum

• Tell Your Small Business Story

Major Tax Relief Passed in 2001 Puts Money Back in the Pockets 
of the Self-Employed

As a result of a strong presence on Capitol Hill, the National Association for the Self-Employed successfully influenced Congress to pass significant legislation last year that will have a positive impact on small-business taxes for at least the next eight years.

Congress passed the Economic Growth and Tax Relief Act of 2001, which provides small businesses with the opportunity to reduce tax obligations and divert money to activities that will build stronger businesses. House Small Business Committee Chairman Don Manzullo, R-Ill., called the legislation “the number one accomplishment for small businesses…the tax relief legislation will put more money into the pockets of our 25 million small-business owners and their employees for years to come.”

One of the immediate benefits for small-business owners and their employees is the lower income tax rates. The legislation lowers ordinary income tax rates for the first time in nearly 15 years, with further decreases in 2004 and 2006.

Entrepreneurs can also look forward to better treatment on estate taxes. For small-business owners, estate planning has significant ramifications that, if not addressed early and thoroughly enough, can jeopardize the transfer of the business to future generations. Under the new rules, the amount of the estate excluded from taxes will be raised, with full repeal of the estate tax in 2010. The exclusion amount jumps to $1 million for 2002 (from the current $675,000); $1.5 million in 2004; $2 million in 2006; and $3.5 million in 2009.

The 2001 legislation also helps strengthen retirement planning for small-business owners and their employees by providing incentives for starting and maintaining retirement programs.

A two-year extension of the Internet tax moratorium was passed by Congress towards the latter part of 2001, essentially avoiding a roadblock that could have kept many small businesses out of the fast lane to growth.

A new IRS procedure now allows serviced-based businesses with annual gross receipts between $1 million and $10 million to use the simpler cash method of accounting, rather than the complex accrual method. Eligible businesses include dentists, veterinarians and contractors, among others. “This streamlined process will ease the paperwork burden for millions of America’s small business,” noted Sen. John F. Kerry, D-Mass, chairman of the Senate Committee on Small Business & Entrepreneurship. “Instead of spending time counting inventory, small-business owners can focus on improving their businesses.”

Last, but certainly not least, Congress passed the American Small Business Emergency Relief and Recovery Act of 2001 to help small businesses directly and indirectly harmed by the September 11th terrorist attacks. The legislation makes it easier for struggling small businesses to quality for the Small Business Administration’s low-interest loans and management counseling services.

NASE Participates in Association Health Plan Forum

The National Association for the Self-Employed (NASE) participated in a forum last week regarding Association Health Plans (AHPs). The forum was hosted by the Greater Washington Society of Association Executives, the Self-Insurance Institute of America, and the Captive Insurance Council of Washington, DC.

The goal of the forum was to highlight the positive affects Association Health Plans (AHPs) would have on our nations’ current healthcare crisis. Over 60% of the uninsured reside in a family employed by a small business. On average, a worker in a firm with less than 10 employees pays 18% more for health insurance than a worker in a firm with 200 or more employees. Alarmingly, health insurance premiums for small businesses are increasing at double-digit rates, while at the same time benefits and health plan choices are decreasing. AHPs can help remedy the severe lack of access to affordable health insurance for small businesses.

The Small Business Health Fairness Act (H.R. 1774, Fletcher/Dooley, S. 858, Hutchinson), which expands Association Health Plans, will empower small business entrepreneurs with the same tools, which large employers and labor unions use to make health coverage affordable for working families.

Speakers at the event included Commissioner Lawrence H. Mirel of the DC Department of Insurance and Securities Regulation and Duane Musser, Executive Director of the Association Healthcare Coalition.

Tell Your Small Business Story

Have excessive government regulations and interventions made it difficult for you to succeed as a small-business owner? Would you like your elected officials to know how current legislation has had a negative impact on your business? Send your message to Washington through Tell Your Small Business Story, the new program from the National Association for the Self-Employed. 

The NASE understands the importance of listening to your real-life experiences as self-employed individuals and wants to share your plight with the nation’s lawmakers. That is why the NASE has created Tell Your Small Business Story to serve as an essential part of the advocacy program.

In addition, Tell Your Small Business Story allows the NASE to educate Members of Congress by sharing your experiences and letting them know how current legislation affects their constituents.

As Congress returns for a new legislative session, the NASE needs your help to convey to our nation’s legislators, the administration and small business organizations the concerns and needs of the self-employed and small-business community. The decisions made by Congress and federal agencies have a direct affect on your ability to startup and successfully run your business. The NASE asks for your help. Make sure small business is not forgotten or left behind. Speak out for small-business today and Tell Your Small Business Story!

For those interested in sending in their small business story regarding healthcare, technology and/or tax issues via mail, please send your Small Business Story to Kristie Darien, NASE Director of Government Affairs, 1225 I Street, NW, Suite 500, Washington D.C., 20005.

For more information, please contact Kristie L. Darien, NASE Director of Government Affairs, at 202-466-2100 or kdarien@nase.org.