• Tax Gap Proposals Will Hinder Micro-Business,
  Says NASE National Tax Advisor
• Lending Act Would Renovate SBA Financing Programs
• Capitol Hill Sees Renewed Push For Universal Health Care

Tax Gap Proposals Will Hinder Micro-Business, Says NASE National Tax Advisor

The National Association for the Self-Employed (NASE) spoke up before Congress regarding the unfair hand micro-businesses are dealt in current proposals to fix the nation’s tax gap, estimated at $353 billion. NASE national tax advisor Keith Hall attended a House Small Business Committee hearing, “Closing the Tax Gap without Creating Burdens for Small Business," at which he emphasized the need for increased education and outreach to improve tax compliance. A handful of lawmakers have endorsed withholding on non-employee payments to ensure proper filing and requiring businesses to obtain and verify with the IRS, Taxpayer Identification Numbers (TIN) from contractors. Other proposals have included requiring credit and debit card companies to report to the IRS annual gross receipts of businesses. Hall noted the overall negative affect these regulations would have on micro-business. “As we take the necessary steps to readjust our financial priorities, we must make certain the path we choose is balanced and effective, rather than detrimental to those sectors contributing most significantly to our economic stability and growth,” Hall said. “The micro-business community is one of these important sectors, rich in job opportunities and the capacity for revenue growth.” “IRS Commissioner Mark Everson has indicated that the IRS model is education plus enforcement equals compliance,” Hall remarked. “However, we feel that the balance between education and enforcement is clearly changing to focus more heavily on enforcement. Increased enforcement at the expense of taxpayer education will not in the long term accomplish sustained, improved compliance.” To read Hall's complete testimony, visit http://advocacy.NASE.org.

Lending Act Would Renovate SBA Financing Programs Lawmakers in the U.S. House of Representatives are looking to improve the climate for small business. As part of a new “Innovation Agenda” proposed by Democrats and introduced last week, lawmakers are hoping to boost the number of patents sought after by small businesses. In order to increase innovation, they want to make the process to secure federal funds less cumbersome. The newly introduced Small Business Lending Improvements Act of 2007 will overhaul and simplify the 7(a) and 504 financing programs offered by the Small Business Administration (SBA). “The NASE is pleased to see that this bill includes provisions that will reduce the burden associated with borrower and lender fees on the SBA’s 7(a) loans without disturbing the stability that the program currently enjoys under a zero-subsidy policy,” said NASE President Bob Hughes. “The bill’s efforts to make the loan process easier and expand outreach will greatly facilitate access to capital for our nation’s micro-businesses.” Among other proposals, the bill will also increase access to capital for typically underserved small business populations and U.S. military veterans. It will establish a designated office to offer community banks wishing to participate in the 7(a) program with direct support from the Small Business Administration. The 504 program will receive additional aid for debt collection, as well as increased community involvement. As part of efforts to help micro-businesses gain access to capital, the NASE started the Business Development Grant program which handed out $150,000 to members in 2006. An additional $200,000 is designated for 2007. For more information on the grant program, visit http://benefits.nase.org/show_benefit.asp?Benefit=MicroBizGrant. To read more about the proposed legislation, visit the Library of Congress at http://thomas.loc.gov/.   Capitol Hill Sees Renewed Push For Universal Health Care While many lawmakers agree that universal health care will be a top issue in the 2008 presidential elections, House Democrats, led by Rep. John Conyers Jr., D-Mich, are urging Congress for a single-payer system now. Rep. Conyers Jr. introduced legislation earlier this year which would allow all Americans to be eligible for the federal Medicaid program. “We’ve seen quite a few proposals for how to fix the nation’s health care crisis,” said Kristie Darien, executive director of the NASE legislative office. “The NASE does not believe the solution to this growing problem is to allow our government to make citizens’ health care choices. Legislators should be working to increase options for quality, affordable health coverage. Not limiting options to one only: the federal government.” Conyers’ bill would seek to offset the cost of the bill’s implementation with a number of tax increases. A health tax of 5 percent would apply to the top 5 percent of wage earners and a 10 percent tax would be applied to the top one percent of wage earners. The bill would repeal the tax cuts President Bush put in place for the nation’s top earners. In addition, it would add a stock transition tax at a fraction of a percent. For more information on the proposal, HR 676, visit http://thomas.loc.gov/. Do any of these issues affect you? Visit the NASE in Action Center and “Tell Your Micro-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 about any of the articles in Washington Watch, contact Kristin Oberlander, NASE public affairs associate, at (202) 466-2100 or koberlander@nase.org.