• NASE President Discusses Access to Capital with Senate

• Paperwork Reduction Bill Passes Senate

NASE President Discusses Access to Capital with Senate

NASE President Robert Hughes was on Capitol Hill last week talking to lawmakers about the difficulty the self-employed and micro-businesses have in obtaining capital. In a roundtable discussion hosted by the Senate Small Business Committee, Bob exchanged ideas and solutions with Chairman John F. Kerry (D-MA), Ranking Member Christopher “Kit” Bond (R-MO) and other members of the small-business community.

“The financial avenues open to rapidly expanding small businesses are increasingly limited,” Sen. Kerry said. “Small-business owners take considerable risks when setting out to finance a growing company, often using personal savings and credit. It is our job to foster small business opportunities and innovation by helping companies attract outside capital and retain more of their earnings for reinvestment.”

Sen. Bond highlighted an important issue to him during the roundtable – a permanent repeal of the estate tax. The estate tax repeal passed as part of President Bush’s tax package last year has a ten-year limit, after which the tax will go back to 2001 rates.

“Thousands of small businesses in this country waste millions of dollars each year on estate planning and insurance costs just to keep the doors open when the owner dies,” Sen. Bond said. “That money could and should be reinvested in those small firms for capital improvements to boost efficiency, expand product and service lines and generate new jobs.”

The panel focused on two pieces of legislation that Sen. Kerry has introduced concerning access to capital. Roundtable participants discussed how to improve the bills to obtain the best possible support for the self-employed and micro-businesses.

The first bill, S. 1903, the Business Retained Income Growth and Expansion Act, or BRIDGE, would allow a rapidly growing business to elect to defer up to $250,000 in federal income tax liability for two years. Payments could be made over a four-year period, and interest payable on the deferral would be at the federal underpayment rate. To be eligible, businesses must have at least 10 percent growth in gross receipts above the prior two-year average, utilize the accrual accounting method and have $10 million or less annual gross receipts.

The second piece of legislation is S.1676, the Affordable Small Business Stimulus Act. This bill would allow a 75-percent capital gains exclusion on new investments that are held at least three years with capitalization of up to $100 million at the time of investment. This bill also includes many important provisions for micro-businesses such as increasing expensing limits to $35,000, allowing for immediate 100-percent deductibility for health insurance and altering depreciation rules for computers or peripheral equipment from five years to three and for software from three years to two. The Single Point Tax Filing Act provision would simplify the tax filing process.

“While the NASE supports the concept of the BRIDGE Act and fully supports the Affordable Small Business Stimulus Act, we urge Congress to focus their efforts on assisting micro-businesses in gaining access to working capital, for example loans of less than $50,000,” remarked NASE President Bob Hughes to the roundtable participants.

To read more about the hearing and view the participant list, click here.
 

Paperwork Reduction Bill Passes Senate

The NASE knows how time-consuming government paperwork can be for a micro-business. Last week, the Senate passed by voice vote a bill that aims to reduce government paperwork for small businesses.

H.R. 327, the Small Business Paperwork Relief Act of 2002, would require government agencies to create a single point of contact for dealing with small businesses and a single format in which small businesses submit information to an agency. The bill also creates a new task force consisting of at least 12 members representing all government agencies that deal with small businesses to streamline the process by which the agencies collect and disseminate information.

After adopting the bill, the Senate sent the bill back to the House for its concurrence.
 

Do any of these issues affect you? Visit the NASE Legislative Action Center and "Tell Your Small Business Story." This will help the NASE understand - on a personal level - how key legislative issues are affecting your business and your bottom line.

For more information, contact Maureen Petron, NASE public affairs manager, at (202) 466-2100 or mpetron@nase.org.