• NASE Supports Higher Mileage Deduction Rates
• Senate Committee Holds SBA Head Nomination Hearing
• Does Entrepreneurialism Run in the Family?
• Estate Tax Update
• Happy Independence Day!
• Member Poll: Immigration Reform

NASE Supports Higher Mileage Deduction Rates

Last week, the NASE wrote a letter of support to Reps. Curt Weldon, R-Pa., and Melissa Bean, R-Ill., for introducing the Keep Small Businesses Profitable Act (H.R. 5583). This legislation would offer relief to 18 million micro-business owners contending with high gasoline prices by temporarily returning the Internal Revenue Service’s (IRS) standard mileage tax deduction to 48.5 cents per gallon through 2006. In an NASE online member poll, 67 percent of respondents said that rising gasoline prices are significantly or moderately hurting their business. Over 40 percent indicated that the rising gas prices have forced them to increase prices on their goods and services. In the wake of Katrina and skyrocketing gasoline prices, the IRS increased the mileage rate temporarily to 48.5 cents. However, at the beginning of 2006 the rate returned to 44.5 cents per mile despite the lack of relief in gasoline costs. “Micro-business owners often depend on their cars to connect with their consumers, or use shipping services to mail products,” said NASE president Robert Hughes. “Most people did not account for continued high fuel costs in their travel or shipping budgets for the year.” Thus, higher oil and gas prices place a burden on all Americans, but are especially onerous for the self-employed and micro-businesses that use their vehicles for business purposes and, in some cases, travel thousands of miles each year. Tell your Members of Congress to support H.R. 5583 by visiting the NASE online Legislative Action Center at http://advocacy.NASE.org. Senate Committee Holds SBA Head Nomination Hearing Steven Preston Last week, the Senate Small Business and Entrepreneurship Committee held a hearing to consider the President’s nominee for Administrator of the U.S. Small Business Administration (SBA), Steven C. Preston. Preston was questioned about many issues by Chairwoman Olympia Snowe, R-Maine, Ranking Minority Member John Kerry, D-Mass., and several other members of the committee. Many members of the committee pressed the nominee on how he would work with the victims of Hurricane Katrina to grant loans and provide assistance in rebuilding their small businesses. Some pointed out that he would need to work within the SBA to develop a better disaster plan that would prevent the slow response time the agency had with Katrina. Preston responded that he hoped to work with private lenders to guarantee loans for Katrina victims, and assured the committee that disaster assistance would be his primary focus if he was confirmed. The committee also wanted to be sure that Preston had the courage and strength to go to the Office of Management and Budget and fight for increased or constant funding for the SBA, whose budget has been cut almost 37 percent since 1999. Preston, whose background is in investment banking and management, said that he was ready for the task and promised to be small businesses’ leading advocate in Washington. Although the committee has gathered bipartisan support for Preston, he did face some tough questions from the committee. Senator Kerry asked him about a potential conflict of interest in the upcoming discussion about changing the rules to permit franchises to be considered small businesses. The question stemmed from Preston’s position as chief financial officer for ServiceMaster, which would have an interest in franchise regulations. Preston said that he would recuse himself from the proceedings upon advice of counsel. Senator Snowe also sought to discover the nominee’s level of commitment to providing the oversight necessary to guarantee that 23 percent of federal contracts were going to small businesses, and that other contracting guidelines would be met. The nominee said that he was prepared and ready to do the job of watchdog to ensure those contracts were being granted to small businesses. Senator Kerry also acknowledged that Preston is a “serious and impressive nominee” who was welcomed by the committee for his management skills. The NASE will continue to follow the nomination process of Steven Preston. A vote has not yet been scheduled but could occur as early as this week. Does Entrepreneurialism Run in the Family? Two new studies found that the entrepreneurial spirit may be influenced by environmental factors. Data from the U.S. Census Bureau’s Characteristics of Business Owners survey find that more than half of all business owners have a self-employed family member. And half of those business owners with self-employed family members worked in that family member’s business. Another study using the same data from the Census Bureau found that working in a family member’s business had a positive and statistically significant effect on business success. Just knowing an entrepreneur does not provide the same success for entrepreneurs. But working in a family member’s business can give future entrepreneurs the knowledge and skill set to run a successful business. This study, “Families, Human Capital, and Small Business: Evidence for the Characteristics of Business Owners Survey,” calls for future studies on the value of mentoring and apprenticeship opportunities for would-be entrepreneurs. To read the study in its entirety, visit http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101720. Estate Tax Update Last week the House of Representatives passed the Permanent Estate Tax Relief Act (H.R. 5638) with a bipartisan 269-156 vote. Senator Bill Frist, R-Tenn., said that the measure will be on hold until after the July 4th recess. He had wanted to bring the measure to a vote in the Senate before the recess. The NASE will continue to follow this issue closely. For more information on the estate tax debate and compromise, see last week’s Washington Watch. Happy Independence Day! Washington Watch will take the week off while the Senate and House are in recess for the 4th of July, but will alert you of any pressing small-business issues. As always, you can stay up to date on the NASE advocacy efforts at http://advocacy.nase.org. Member Poll: Immigration Reform The issue of immigration has been front-page news over the past few weeks. Both the Bush Administration and Congress are working on proposals to reform our current immigration policy and address the issue of undocumented immigrants within our nation. Immigration has a large impact on our economy and small businesses in various industries. Let the NASE know your opinions on current immigration policy and suggested reforms by visiting the MyNASE Web site at http://my.NASE.org/. Log in to your free MyNASE Web account. If you have not set up an account, you can do so at http://my.NASE.org/ with your member number.