President Obama has sent his "Startup America Legislative Agenda" to Congress. And most of it is pretty darn good. Without a lot of commentary, here are some of the highlights:
TAX BREAKS FOR SMALL ENTREPRENEURIAL AND C CORPS
CAPITAL GAINS TAXATION. Permanently eliminate capital gains taxes on investments in C corporations with less than $50 million in assets. This break would be exempt from the alternative minimum tax, and investors would have six months to roll over their gains into new investments in small businesses.
CAPITAL EXPENDITURES. Allow businesses to write off 100 percent of their capital expenditures (e.g. new equipment) this year, extending a bonus depreciation break that had been in effect from September 8, 2010 to January 1, 2012.
NEW PAYROLL TAX CREDIT. Provide small businesses with a 10 percent income tax credit on new payroll—either new employees or higher wages for existing employees—added in 2012.
STARTUP COSTS DEDUCTION. Permanently double the deduction for the expenses of starting a new business from $5,000 to $10,000.
ACCESS TO FINANCING
CROWD FUNDING. Allow businesses to raise up to $1 million a year through crowdfunding—using the Internet to solicit small equity investments from large numbers of people.
EXTEND REGULATION A. Permit small companies to offer up to $50 million in stock to the public without registering it with the Securities and Exchange Commission. The current limit for such Regulation A offerings is $5 million—too low to be of much use.
EASING UP ON AUDITS. Phase in costly financial statement and audit requirements for small, young companies during their first five years after an initial public offering. This would encourage more companies to go public by reducing the costs that go along with it.
EXPAND SBIC. Expand the Small Business Investment Company program, which provides loans to venture capital firms licensed by the Small Business Administration. These firms use this money, along with capital they raise themselves, to invest in small businesses.
These ideas are not all new. What is new is that they are being presented to Congress NOW, at the beginning of a new session, in an effort to kick start the small business economy.
The head of the Small Business Administration is now part of the President's Cabinet, effective today.
All in all, it is a good day for small business. Need we say it? NOW is the time to contact your own Senators and Representative. They won't act if they don't think you care, and the more you care, the more likely it is that these provisions will be passed. No matter how pro-small business your legislators are, pressure them all. And keep it up.
Then get your business plan in order -- small business financing is on the way!
Ulla, these are still recommendations, and both houses of Congress need to approve them yet. But we are hopeful that at least some of them will become law.
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