[Congressional Record Volume 156, Number 89 (Tuesday, June 15, 2010)]
[House]
[Pages H4469-H4476]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
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SMALL BUSINESS JOBS TAX RELIEF ACT OF 2010
Mr. LEVIN. Mr. Speaker, pursuant to H. Res. 1436, I call up the bill
(H.R. 5486) to amend the Internal Revenue Code of 1986 to provide tax
incentives for small business job creation, and for other purposes, and
ask for its immediate consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 1436, the bill
is considered read.
The text of the bill is as follows:
H.R. 5486
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
TITLE V--TAX PROVISIONS
SEC. 500. SHORT TITLE; ETC.
(a) Short Title.--This title may be cited as the ``Small
Business Jobs Tax Relief Act of 2010''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this title an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this
title is as follows:
Sec. 500. Short title; etc.
Subtitle A--Small Business Tax Incentives
Part 1--General Provisions
Sec. 501. Temporary exclusion of 100 percent of gain on certain small
business stock.
Part 2--Limitations and Reporting on Certain Penalties
Sec. 511. Limitation on penalty for failure to disclose certain
information.
Sec. 512. Annual reports on penalties and certain other enforcement
actions.
Part 3--Other Provisions
Sec. 521. Increase in amount allowed as deduction for start-up
expenditures.
Sec. 522. Nonrecourse small business investment company loans from the
Small Business Administration treated as amounts at risk.
Sec. 523. Benefits under the Small Business Borrower Assistance Program
excluded from gross income.
Subtitle B--Revenue Provisions
Sec. 531. Required minimum 10-year term, etc., for grantor retained
annuity trusts.
Sec. 532. Crude tall oil ineligible for cellulosic biofuel producer
credit.
Sec. 533. Time for payment of corporate estimated taxes.
Subtitle A--Small Business Tax Incentives
PART 1--GENERAL PROVISIONS
SEC. 501. TEMPORARY EXCLUSION OF 100 PERCENT OF GAIN ON
CERTAIN SMALL BUSINESS STOCK.
(a) In General.--Subsection (a) of section 1202 is amended
by adding at the end the following new paragraph:
``(4) Special 100 percent exclusion.--In the case of
qualified small business stock acquired after March 15, 2010,
and before January 1, 2012--
``(A) paragraph (1) shall be applied by substituting `100
percent' for `50 percent',
``(B) paragraph (2) shall not apply, and
``(C) paragraph (7) of section 57(a) shall not apply.''.
(b) Conforming Amendments.--Paragraph (3) of section
1202(a) is amended--
(1) by striking ``after the date of the enactment of this
paragraph and before January 1, 2011'' and inserting ``after
February 17, 2009, and before March 16, 2010''; and
(2) by striking ``Special rules for 2009 and 2010'' in the
heading and inserting ``Special 75 percent exclusion''.
(c) Effective Date.--The amendments made by this section
shall apply to stock acquired after March 15, 2010.
PART 2--LIMITATIONS AND REPORTING ON CERTAIN PENALTIES
SEC. 511. LIMITATION ON PENALTY FOR FAILURE TO DISCLOSE
CERTAIN INFORMATION.
(a) In General.--Subsection (b) of section 6707A is amended
to read as follows:
``(b) Amount of Penalty.--
``(1) In general.--Except as otherwise provided in this
subsection, the amount of the penalty under subsection (a)
with respect to any reportable transaction shall be 75
percent of the decrease in tax shown on the return as a
result of such transaction (or which would have resulted from
such transaction if such transaction were respected for
Federal tax purposes).
``(2) Maximum penalty.--The amount of the penalty under
subsection (a) with respect to any reportable transaction for
any taxable year shall not exceed--
``(A) in the case of a listed transaction, $200,000
($100,000 in the case of a natural person), or
``(B) in the case of any other reportable transaction,
$50,000 ($10,000 in the case of a natural person).
``(3) Minimum penalty.--The amount of the penalty under
subsection (a) with respect to any transaction for any
taxable year shall not be less than $10,000 ($5,000 in the
case of a natural person).''.
(b) Effective Date.--The amendment made by this section
shall apply to penalties assessed after December 31, 2006.
SEC. 512. ANNUAL REPORTS ON PENALTIES AND CERTAIN OTHER
ENFORCEMENT ACTIONS.
(a) In General.--The Commissioner of Internal Revenue, in
consultation with the Secretary of the Treasury, shall submit
to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate an
annual report on the penalties assessed by the Internal
Revenue Service during the preceding year under each of the
following provisions of the Internal Revenue Code of 1986:
(1) Section 6662A (relating to accuracy-related penalty on
understatements with respect to reportable transactions).
(2) Section 6700(a) (relating to promoting abusive tax
shelters).
(3) Section 6707 (relating to failure to furnish
information regarding reportable transactions).
(4) Section 6707A (relating to failure to include
reportable transaction information with return).
(5) Section 6708 (relating to failure to maintain lists of
advisees with respect to reportable transactions).
(b) Additional Information.--The report required under
subsection (a) shall also include information on the
following with respect to each year:
(1) Any action taken under section 330(b) of title 31,
United States Code, with respect to any reportable
transaction (as defined in section 6707A(c) of the Internal
Revenue Code of 1986).
(2) Any extension of the time for assessment of tax
enforced, or assessment of any amount under such an
extension, under paragraph (10) of section 6501(c) of the
Internal Revenue Code of 1986.
(c) Date of Report.--The first report required under
subsection (a) shall be submitted not later than December 31,
2010.
PART 3--OTHER PROVISIONS
SEC. 521. INCREASE IN AMOUNT ALLOWED AS DEDUCTION FOR START-
UP EXPENDITURES.
(a) In General.--Subsection (b) of section 195 is amended
by adding at the end the following new paragraph:
``(3) Increased limitation for taxable years beginning in
2010 or 2011.--In the case of any taxable year beginning in
2010 or 2011, paragraph (1)(A)(ii) shall be applied--
``(A) by substituting `$20,000' for `$5,000', and
``(B) by substituting `$75,000' for `$50,000'.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.
SEC. 522. NONRECOURSE SMALL BUSINESS INVESTMENT COMPANY LOANS
FROM THE SMALL BUSINESS ADMINISTRATION TREATED
AS AMOUNTS AT RISK.
(a) In General.--Subparagraph (B) of section 465(b)(6) is
amended to read as follows:
``(B) Qualified nonrecourse financing.--For purposes of
this paragraph--
``(i) In general.--The term `qualified nonrecourse
financing' means any financing--
``(I) which is qualified real property financing or
qualified SBIC financing,
``(II) except to the extent provided in regulations, with
respect to which no person is personally liable for
repayment, and
``(III) which is not convertible debt.
``(ii) Qualified real property financing.--The term
`qualified real property financing' means any financing
which--
``(I) is borrowed by the taxpayer with respect to the
activity of holding real property,
``(II) is secured by real property used in such activity,
and
``(III) is borrowed by the taxpayer from a qualified person
or represents a loan from any Federal, State, or local
government or instrumentality thereof, or is guaranteed by
any Federal, State, or local government.
``(iii) Qualified sbic financing.--The term `qualified SBIC
financing' means any financing which--
``(I) is borrowed by a small business investment company
(within the meaning of section 301 of the Small Business
Investment Act of 1958), and
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``(II) is borrowed from, or guaranteed by, the Small
Business Administration under the authority of section 303(b)
of such Act.''.
(b) Conforming Amendments.--Subparagraph (A) of section
465(b)(6) is amended--
(1) by striking ``in the case of an activity of holding
real property,''; and
(2) by striking ``which is secured by real property used in
such activity''.
(c) Effective Date.--The amendments made by this section
shall apply to loans and guarantees made after the date of
the enactment of this Act.
SEC. 523. BENEFITS UNDER THE SMALL BUSINESS BORROWER
ASSISTANCE PROGRAM EXCLUDED FROM GROSS INCOME.
(a) In General.--Part III of subchapter B of chapter 1 is
amended by adding at the end the following new section:
``SEC. 139F. BENEFITS UNDER THE SMALL BUSINESS BORROWER
ASSISTANCE PROGRAM.
``(a) In General.--Gross income shall not include any
amount paid on behalf of a borrower by the Administrator of
the Small Business Administration under the Small Business
Borrower Assistance program established under section 402 of
the Small Business Assistance Fund Act of 2010 (as in effect
immediately after the date of the enactment of such Act).
``(b) Denial of Double Benefit.--Notwithstanding any other
provision of this subtitle, with respect to the person for
whose benefit a payment described in subsection (a) is made--
``(1) Interest.--No deduction shall be allowed for interest
to the extent the liability for such interest is covered by
such payment.
``(2) Payments of principal.--If any payment is applied to
reduce the principal of the loan to which such payment
relates--
``(A) Allocation among financed expenditures.--Such payment
shall be allocated pro rata among the expenditures financed
with such loan.
``(B) Credits and deductible expenses.--No deduction or
credit shall be allowed for, or by reason of, any such
expenditure to the extent of the amount of the payment
allocated to such expenditure under subparagraph (A).
``(C) Adjustment of basis.--The adjusted basis of any
property acquired with such expenditure shall be reduced to
the extent of the amount of the payment allocated to such
expenditure under subparagraph (A).''.
(b) Clerical Amendments.--The table of sections for part
III of subchapter B of chapter 1 is amended by adding at the
end the following new item:
``Sec. 139F. Benefits under the Small Business Borrower Assistance
Program.''.
(c) Effective Date.--The amendments made by this section
shall apply to payments made after the date of the enactment
of this Act.
Subtitle B--Revenue Provisions
SEC. 531. REQUIRED MINIMUM 10-YEAR TERM, ETC., FOR GRANTOR
RETAINED ANNUITY TRUSTS.
(a) In General.--Subsection (b) of section 2702 is
amended--
(1) by redesignating paragraphs (1), (2) and (3) as
subparagraphs (A), (B), and (C), respectively, and by moving
such subparagraphs (as so redesignated) 2 ems to the right;
(2) by striking ``For purposes of'' and inserting the
following:
``(1) In general.--For purposes of'';
(3) by striking ``paragraph (1) or (2)'' in paragraph
(1)(C) (as so redesignated) and inserting ``subparagraph (A)
or (B)''; and
(4) by adding at the end the following new paragraph:
``(2) Additional requirements with respect to grantor
retained annuities.--For purposes of subsection (a), in the
case of an interest described in paragraph (1)(A) (determined
without regard to this paragraph) which is retained by the
transferor, such interest shall be treated as described in
such paragraph only if--
``(A) the right to receive the fixed amounts referred to in
such paragraph is for a term of not less than 10 years,
``(B) such fixed amounts, when determined on an annual
basis, do not decrease relative to any prior year during the
first 10 years of the term referred to in subparagraph (A),
and
``(C) the remainder interest has a value greater than zero
determined as of the time of the transfer.''.
(b) Effective Date.--The amendments made by this section
shall apply to transfers made after the date of the enactment
of this Act.
SEC. 532. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC BIOFUEL
PRODUCER CREDIT.
(a) In General.--Clause (iii) of section 40(b)(6)(E) is
amended--
(1) by striking ``or'' at the end of subclause (I),
(2) by striking the period at the end of subclause (II) and
inserting ``, or'',
(3) by adding at the end the following new subclause:
``(III) such fuel has an acid number greater than 25.'',
and
(4) by striking ``unprocessed'' in the heading and
inserting ``certain''.
(b) Effective Date.--The amendment made by this section
shall apply to fuels sold or used on or after January 1,
2010.
SEC. 533. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
The percentage under paragraph (2) of section 561 of the
Hiring Incentives to Restore Employment Act in effect on the
date of the enactment of this Act is increased by 7.75
percentage points.
The SPEAKER pro tempore. The gentleman from Michigan (Mr. Levin) and
the gentleman from Michigan (Mr. Camp) each will control 30 minutes.
The Chair recognizes the gentleman from Michigan.
General Leave
Mr. LEVIN. Mr. Speaker, I ask unanimous consent that all Members have
5 legislative days to revise and extend their remarks and insert
extraneous material in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
Mr. LEVIN. I yield myself such time as I may consume.
This bill, H.R. 5486, the Small Business Jobs Tax Relief Act of 2010,
is, in a few words, a continuation of our work to spur job creation and
to really improve the quality of life in all of our communities. Since
the beginning of this year, our economy has created 982,000 jobs. That
is a reversal of 22 straight months of job losses, a very long stretch
indeed. But we all know that far too many people today are out of work
and the unemployment rate remains at a very unacceptably high 9.7
percent. So something considerable has been done, but we have to do
more.
According to the SBA--and I think we all know this--small firms
created 64 percent of the net new jobs between 1993 and the third
quarter of 2008. So small businesses help lead job creation in a
recovery, but today, small firms are having difficulty accessing
capital.
So what does this bill do? It provides a total of $3.588 billion in
tax cuts to help American small businesses. It is part of the
partnership between the public and the private sector, relying on the
private sector to do the job creation. And I want to emphasize, this
bill does not add a dime to our deficit. It doesn't even add a penny to
our deficit.
So let me explain the provisions in H.R. 5486. First of all, relating
to business stock, small business stock, and capital gains, presently
there's an exclusion of 75 percent because of the Recovery Act, and I
emphasize that. This would increase the exclusion to 100 percent. It
provides relief for small businesses from tax penalties when that is
indeed appropriate. It also increases the deduction for startup costs
for expenses not related to capital or equipment. It increases it from
$5,000 to $20,000. So these are important stimuli for small business to
help them create more jobs.
As I said earlier, this is offset. It will not add a dime or, indeed,
a penny to the Federal deficit. It includes two provisions that have
already passed this House. One relates to what is sometimes called a
grandchild of black liquor. It relates to essentially a byproduct. What
this does, building on the work that we did in earlier bills, is to
prevent people from receiving a windfall from unintended application of
renewable fuel credits.
The second part relates to what are called grantor retained annuity
trusts, and I want to just say a quick word about this. This is clearly
a loophole. This is clearly an abuse. Here's what happens, to try to
put it in the simplest terms: A short-term trust usually is created by
someone for a child. Then the person who created the trust takes back
the value, let's say, in a few annual payments. So there's no gift tax
for the grantor. The way it works today, all of the increase in the
value of the stock is also outside of the gift tax.
So, essentially, what is happening here is a paper transaction that
leads to escape of taxation, and this provides in our bill that there
has to be a 10-year term for the trust to be sure that the trust has
actual substance. This change raises $5.297 billion over 10 years. So
what this means, breaking it down in simple terms, is that about $500
million per year from taxpayers is lost today through paper
transactions, and we close the loophole. So, again, because of this,
there is not any added cost.
We also, if I might say so and will be discussing this I guess
tomorrow, it provides money for the small business lending package,
H.R. 5297. So that is also budget neutral, and that provides some
additional important small business loan help so badly needed. It's
[[Page H4471]]
hard to understand why people would vote against this. Plus, a
provision that is $2 billion worth, and it goes to States and local
governments, and they have written us, urging that we provide some
assistance so that they can increase the flow of loans to small
businesses in their States.
So, in a word, we have a bill that is essentially a two-fer. It
provides needed assistance for job creation by small business, and it's
paid for. So I urge very much that somehow the other side can cross the
bridge and join together instead of creating obstacles and vote for
this bill and then its partner bill tomorrow.
I reserve the balance of my time.
Mr. CAMP. Mr. Speaker, I yield myself such time as I may consume.
(Mr. CAMP asked and was given permission to revise and extend his
remarks.)
Mr. CAMP. Mr. Speaker, this bill contains many positive features but
also some negative ones, and thus, I reluctantly plan to oppose it.
Like my friend on the other side of the aisle, I'm pleased to see
that it does include some tax relief, albeit limited, for small
businesses, including provisions championed by both Republicans and
Democrats. I'm also pleased, unlike earlier versions of this
legislation, the most objectionable revenue raiser, a provision that
could provoke retaliation by other countries and that even the Obama
administration officials warned would violate our international treaty
obligations, has been dropped from this bill. But despite those
positive features, I will be voting against this bill for several
important reasons.
First, while the tax relief in here is welcome, it's not enough and
won't actually help small businesses create the jobs we need to reduce
our stubbornly high unemployment rate. While I would certainly support
further lowering taxes on small businesses, the last thing they need is
higher taxes, which is exactly what they are facing from this Congress.
Just last month, the majority pushed through an $11.2 billion tax
hike on certain small businesses that would subject their profits to
employment taxes, and at the end of 2010, all individual income tax
rates, as well as taxes on dividends and capital gains, are scheduled
to rise dramatically. Because so many small businesses pay taxes at the
individual level, the fear of these increases is chilling expansion and
hiring and, therefore, job creation. So the majority's record on tax
policy affecting small businesses is spotty at best.
Second, this bill, like others before it, provides a stark reminder
of the majority's view of the Ways and Means Committee as an ATM
machine to fund other spending. Here, the majority is seeking to
generate $7.1 billion in additional tax revenue but would only provide
$3.6 billion in tax relief over the next decade. The rest of the money
raised will be used to offset the cost of another bill, H.R. 4297,
which was reported by the Financial Services Committee, that creates
another TARP-like program. Some might call it TARP III.
While I'm glad the majority found offsets that are less economically
damaging than some that have previously passed the House, the practice
of using permanent changes in tax receipts to fund temporary spending
is disappointing and portends further and larger tax hikes in the
future, perhaps as soon as the end of this month when the majority
hopes to complete action on a financial system reform bill.
Mr. Speaker, especially with the unemployment rate continuing to
hover near 10 percent, our small businesses, the engine of economic
growth and job creation, need help, but this bill isn't enough, and it
takes us further down the dangerous road of higher spending our Nation
cannot afford.
I reserve the balance of my time.
Mr. LEVIN. Before I yield, I just want to say to Mr. Camp, I listened
intently, and I can't understand your opposition. You like the
provisions. You don't like what we once passed. If you don't like what
we passed before--and I disagree with you--it's even more of a reason
to vote for this bill.
You complain about permanent changes. We're closing a loophole
permanently. You want us to close it temporarily? And we're preventing
a provision coming into effect that should never come into effect.
So I just urge people to listen to the quality of this discussion,
and I think, so far, it all points to everybody on both sides of the
aisle voting for this bill. It helps small business. That's been
acknowledged, and you don't challenge the tax cuts in terms of their
merits. You talk about another tax cut in another bill you didn't like.
I think you find it hard to find anything you like.
I now yield 2 minutes to another member of our committee, our
distinguished colleague from Massachusetts (Mr. Neal).
Mr. NEAL. I thank Mr. Levin for yielding.
Mr. Speaker, I stand in support of this small business bill before us
today. In addition to the several tax breaks that Mr. Levin has pointed
out, the bill will create a lending fund for our community banks to
crop into. That's perhaps the most salient part of this proposal, to
get capital flowing, to get capital back into the marketplace so that
there's an opportunity for small businesses across the country to take
advantage of what heretofore has become a dried up resource, and that
is the availability of capital.
{time} 1600
While the data tells us the economy is improving, our small
businesses back home are still struggling, and much of that is due to
the fact that lines of credit have tightened up or in many instances
simply gone away. Now, those businesses are doing their best to keep
everyone on the payroll even though sales are slow in an attempt to
climb back, but the regulators have kept a strong hand and hold on
banks that otherwise might be lending.
Now, conceptually, I don't know how you can be opposed to this
legislation. Community banks provide more than half of the small
business loans in America that are less than $100,000. In Massachusetts
alone, commercial bank lending to small businesses through the SBA
guarantee program has doubled over the last year. This legislation will
help even more.
If you really care about small businesses and entrepreneurship and
growing the economy, the essential argument here is how do we get these
small business people back on their feet. The proposal here is to
provide some tax relief. Greater lending possibilities with the
prospect of encouraging small businesses to grow and invest is a very
important part of what's incorporated in this very piece of
legislation.
Now, always we would find amongst the 435 of us in this institution a
different way to do it, but that's not the proposal in front of us.
Mr. CAMP. Mr. Speaker, I yield myself such time as I may consume.
I just want to respond to my friend from Michigan, the chairman, and
say it's really about the reality of this legislation, not just the
rhetoric. And while excluding capital gains on the sale of small
business stock is a great provision, the problem is this is drafted so
narrowly that the small businesses have to be C corporations. And as we
know, only a fraction of small businesses will be considered qualified
small businesses to take advantage of this provision. This is the
largest piece of this so-called ``small business relief'' bill. And
while it's great to talk about, the reality of it is going to be very
limited.
As I said in my statement, there are some positive things in this
bill. Obviously, closing the Black Liquor 3 loophole is something I
support, but on balance, because the bill isn't really going to do
anything to create jobs, A, and, B, because there are, again, going to
be temporary provisions that are paid for with permanent tax increases,
and, third, the revenue raiser on the estate tax area on the Grantor
Retained Annuity Trust is really one that ought to be reserved for when
we have to deal with estate tax reform. As you know, the law has
expired. There are bills moving through the Congress to reinstate the
estate tax. This really is appropriate to that area.
I think it is absolutely unconscionable that we've gone all this time
with no estate tax, with everyone understanding that the majority is
going to create a retroactive death tax bill that's going to try to
come back through the beginning of the year. This is where that
provision should be.
So, again, I reluctantly oppose this bill. I think there are some
good things
[[Page H4472]]
in it; unfortunately, they don't go far enough.
I now yield 2 minutes to the distinguished member of the Ways and
Means Committee, the gentleman from Illinois (Mr. Roskam).
Mr. ROSKAM. I thank Mr. Camp for yielding.
Chairman Levin said a minute ago that it's hard to find anything that
the minority likes. I'll tell you a few things, Mr. Speaker, that we
would like. We would have liked a stimulus that worked. We would have
liked a stimulus where unemployment actually peaked at 8 percent as
long as our children and grandchildren were being foisted with a $1
trillion obligation. We would have liked it if last month's
unemployment numbers weren't goosed up by simply census employees
joining the ranks. We would have liked it, Mr. Speaker, if during the
health care debate a thoughtful approach had been put forward that
wasn't going to cost employers like Caterpillar in my home State $100
million in the first year or John Deere $150 million in the first year.
We would have like those things, Mr. Speaker.
I think what the majority is laying out is kind of a happy life of
low expectations. That's not a bad way to go through life, but I think
that we can do so much more than this. And to Mr. Camp's point, there
are some things that are here that are decent and that are marginally
okay and slightly better, but is that how dim the lights are in this
Chamber that that's our expectation, that something is just sort of
okay? I mean, this is an increase in government spending, after all, so
I think we can do so much better. Why is it, Mr. Speaker, that we are
halfway through the tax year and the research and development tax
credit isn't resolved by this majority in this Congress? Why is it that
the death tax is a complete ambiguity?
So in answer to the chairman, I have a lot of respect for him and for
his work and his sincerity, but I think I want to echo Mr. Camp's
observation, that this is so narrowly crafted and so de minimus and
being proclaimed by the same folks that promised us great things in the
stimulus that I think we can do better.
Mr. LEVIN. You say do better; you won't vote for anything.
I yield 2 minutes to the distinguished gentleman from New York (Mr.
Rangel) to explain why this is more than de minimus, a bill that needs
to be voted on on a bipartisan basis.
(Mr. RANGEL asked and was given permission to revise and extend his
remarks.)
Mr. RANGEL. Mr. Speaker, sometimes when life gets rough for me, I try
to put myself in the shoes of the other guy. What a rough time to be in
the minority. We have so many people whose hopes and dreams have been
shattered, they're out of work, they're angry, the economy has been
blown wide open, and we find that the order of the day with the
opposition is that they just have to say no. It must be awkward to say
what I would do if this bill was defeated. It must be terrible to talk
about the past things that haven't worked when someone has just lost
their home or can't pay their rent or put food on the table or get
clothes for their kids.
It's a rough time for all Americans, and anybody who believes that
Democrats always get it right, well, it's difficult to do, but for
crying out loud, we have to do something. The $787 billion we voted on
trying to get us out of this economic mess, and all the money just
floated on the top for the big banks. Now we're trying to see what
really works. Listening to the calls of small business people, trying
to make certain they have capital to get the inventory, to provide the
goods and services, to hire people, and as everyone admits, this is
where the major jobs come.
For crying out loud, sometimes the late John Kennedy said, The party
just asks too much of you. These people are out of work. They're not
Democrats and Republicans; they're American people. They work hard for
their dignity. They're the ones that supported our country during good
times. And now that times are rough, they've got to listen to debates
between Republicans and Democrats as to, gee, this is what I would do
if I was in charge? I don't think that's fair. And I really believe
that the voters are not going to believe that all we can do is come up
with ideas, have them ridiculed, and then just say no.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. LEVIN. I yield the gentleman 1 additional minute.
Mr. RANGEL. Thank you so much, Mr. Chairman.
I know from time to time when my party asked me to carry too much
weight that morally I don't believe I can do it, that somehow there are
people on our side of the aisle that take the risk and being able to
say I did it not because my party asked me to do it, I did it not to be
opposed, I did it because it's the right thing to do.
Now you have to find the issue; if it's not health care, if it's not
education, if it's not national security, how about the opportunity to
work, to make a living, to have the dignity, to have the pride, to
raise your family, and indeed to pay taxes?
This is going to be our last opportunity for this year. Maybe next
year there will be a change in the philosophy--if you want to call it
that--of the minority and they will work together; but I do hope this
idea that on everything we come up with to improve the quality of life
for the people of this great Nation, that the opposition can come up
with something except ``just say no.''
Mr. CAMP. Mr. Speaker, I yield myself such time as I may consume.
This bill is going to spend taxpayers' money. I believe we have an
obligation, if we're going to spend taxpayers' money, that we do it
effectively. On Friday night, the Treasury released a report that in
2015 our debt will exceed the gross domestic product of this country.
We've had expert testimony before the Debt Commission that said when
your debt gets to 90 percent of GDP, you lose 1 percent off economic
growth, which translates into 1 million jobs.
This bill, because of how narrowly focused it is, how narrowly
drafted it is, virtually no small businesses will take advantage of the
exclusion of capital gains because they have to be C corporations. And
if there is one trend we've seen, it's that businesses are being
organized as passed-through entities now. That's how America,
particularly small business America, is being organized. So while this
is great rhetoric, this bill isn't going to be effective in doing
anything.
And let me just say, I heard the former chairman say that Republicans
just say no. On the health care bill, we had a viable alternative. In
fact, I will say the vote on the health care bill was bipartisan
opposition, only majority partisanship support for that legislation.
Whether it's been stimulus or health care or energy, we have had viable
alternatives on the floor that we have brought forward. On this
particular bill, I think that better work could have been done, more
effective work could have been done. And, frankly, in this era of the
highest debt ever this country has seen, I think we have an obligation
that if we're going to spend taxpayers' dollars, it's done in an
effective way and a way that gets results, and this bill falls short.
I reserve the balance of my time.
Mr. LEVIN. I yield 2 minutes to the distinguished gentleman from
Oregon (Mr. Blumenauer), member of the Ways and Means Committee.
Mr. BLUMENAUER. Mr. Speaker, this legislation is personal for me.
We've watched our country come back from the brink in the fall of 2008.
In my State of Oregon, helped by Recovery Act funds of about $6
billion, we've been able to stabilize and make some progress. Is it
enough? Absolutely not. But I've had a steady parade of people coming
to my office thanking me for the investment that was made in terms of
infrastructure, in terms of health care, in terms of making sure that
we didn't have layoffs of public employees.
Now we have a provision here that is an opportunity to focus on small
business. It is a package, as the chairman mentioned, with two pieces.
It's ironic that our friends are telling us that it's just not enough.
These are small pieces, yet they were saying, on the other hand, the
legislation we had that CBO has scored over 1.2 million jobs to as much
as 2.8 million saved or created was too big. Well, we ought to be
chipping away as we can on this. Having $30 billion for a small
business lending fund, being able to provide a couple billion dollars
of tax exclusion for small
[[Page H4473]]
business capital formation are positive items.
{time} 1615
You know, one of the things that strikes me as ironic is that our
friends on the other side of the aisle ignore the fact that the
Recovery Act legislation that we had previously, 42 percent of it, was
for tax cuts and for preventing the impact of the alternative minimum
tax from hitting middle and upper middle-income families. Every family
in America which made under $250,000 a year got tax cuts last year, and
they are getting tax cuts this year. We have tried tax cuts to help
move things forward. Now, this is small business lending.
The SPEAKER pro tempore (Mr. Serrano). The time of the gentleman has
expired.
Mr. LEVIN. I yield the gentleman an additional 2 minutes.
Mr. BLUMENAUER. This is part of an ongoing effort which is making a
difference. The job losses peaked the month that President Obama took
office--not his fault. They had been building for 22 months. Now we are
making some progress. Is it enough? All of us agree that it is not, but
I would suggest that dismissing this because they think it doesn't
solve everything would be, I'm afraid, disingenuous. I don't think it's
helpful.
I strongly urge the support of this legislation and then for us to
continue with the task of rebuilding and renewing America, of reforming
the Tax Code, and of coaxing the most out of these investments.
Mr. CAMP. At this time, I yield the customary 1 minute to the
distinguished minority leader, the gentleman from Ohio (Mr. Boehner).
Mr. BOEHNER. I want to thank my colleague for yielding.
Mr. Speaker, the bill before us today is supposed to be about helping
small businesses. We do need to help small businesses as they are the
engines of economic growth in our country. When you look at the jobs
report that came out last month, there were only 41,000 private-sector
jobs created.
Yet, if we really want this bill to work and if we really want small
businesses to be able to begin hiring once again, what we really need
to do is to repeal the job-killing health care law that was passed in
this Chamber on March 21. The heart of that law is something that is
called the ``individual mandate.'' The individual mandate forces
Americans to buy health insurance whether they want to or not, whether
they can afford it or not. For small businesses, if they don't provide
health insurance, guess what? The government is going to tax you. This
is preventing small businesses from hiring additional people.
Twenty States and the Nation's leading small business organization
agree that this law is unconstitutional, and they are fighting to
overturn it. The Federal Government shouldn't be in the business of
forcing you to buy health insurance and of taxing you if you don't.
If we really want to help small businesses get back to creating jobs,
we should repeal the job-killing health care law, and we should replace
it with reforms that will lower the cost of health insurance and that
will help protect American jobs.
My colleague from Michigan will be offering a proposal tonight to
repeal the unconstitutional individual mandate, which is at the heart
of this new law. His idea is posted right now on
AmericaSpeakingOut.com. Americans are speaking out on it, and I hope my
colleagues will get engaged and will see what the American people have
to say about this individual mandate and about the taxes associated
with it, but it is pretty clear.
When we get to the motion to recommit, we will offer a motion that
will eliminate the individual mandate, and every Member of this House
will have an opportunity to stand up for their constituents or to look
the other way.
Mr. LEVIN. Mr. Speaker, I yield 2 minutes to a member of our
committee, the gentleman from New Jersey (Mr. Pascrell).
Mr. PASCRELL. Mr. Speaker, I rise in strong support of H.R. 5486.
That is exactly correct. We should stop looking away. Let's focus on
what the subject really is.
The gentleman just left the floor, but in the final months of the
last administration, on average, we had a loss of 725,000 jobs. This is
the first increase that we have had in the private sector in over 2
years. So you are the party of ``no.'' There are no two ways about it.
Ever since we hit 750,000 in January of 2009, we have had an
improvement every month, and now we are finally in the plus area. It
took us 8 years to get into the mess. It is going to take us more than
a year and a half to get out of it.
This legislation is incredibly important because it will help this
country's small businesses, both new and already existing, by making
the Tax Code work for them. After years of misguided tax policies from
the previous administration, which only helped extraordinarily wealthy
individuals, the Ways and Means Committee is focusing its efforts on
the real engine of the American economy: one-third tax cuts in the
stimulus, one-third investment in the infrastructure, one-third
investment in informational technology, energy jobs, and tax
credits. That record is unparalleled. The tax cuts of this year and
last year are the largest in the history of this country for any 2-year
period because we help the middle class. That is what our party is all
about.
According to the Small Business Administration, small businesses have
generated 64 percent of the new jobs over the past 15 years, and they
must be at the forefront of the economic recovery today.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. LEVIN. I yield an additional 1 minute to the distinguished
gentleman.
Mr. PASCRELL. How dare someone come before this body and talk about
their alternative to the health bill. Their alternative to our health
bill would have started the dismantling of Medicare. Read the language
of their alternative.
While our economy is growing stronger, unemployment is still too
high, which is why we are directing aid to our small businesses. The
bill assists already established small businesses by building on the
Recovery Act's exclusion of 75 percent of business capital gains to now
temporarily exclude 100 percent of capital gains from qualifying
stocks, thereby encouraging investment in small businesses, which
create jobs but which are encountering problems with restricted access
to credit. The bill also helps people who want to start new businesses
by quadrupling deductions and by increasing the cap for start-up
expenses.
This legislation is imperative in recovery. I ask that we all vote
for it.
Mr. CAMP. Mr. Speaker, I reserve the balance of my time.
Mr. LEVIN. I yield 2 minutes to the distinguished gentlewoman from
Pennsylvania, Allyson Schwartz.
Ms. SCHWARTZ. I thank the chairman for his good work on small
business and on the economic recovery.
Mr. Speaker, I rise in support of the Small Business Jobs Tax Relief
Act, which, when merged with the Small Business Jobs Credit Act, will
increase lending to small businesses, will expand entrepreneurship, and
will put Americans to work.
The bill offers small businesses additional capital through capital
gains tax cuts, relief from onerous tax penalties, and expanded
deductions for start-up costs. It provides funding to create a small
business lending pool which will make loans available to small
businesses through our smaller community banks. This pool will provide
small business access to much needed capital to acquire new equipment,
to renovate, to make energy-efficiency improvements or for other
business growth opportunities. It is hard to overstate how important
access to capital is for small business, so this action is critically
important.
Last week, during a Budget Committee hearing, Ben Bernanke responded
to me when I outlined our actions to help our small businesses. He said
he was ``glad the Congress is exploring these different programs for
making credit available to small businesses.'' He talked additionally
about the need to be particularly attentive to new and start-up
companies, all critical to our economic recovery and job growth.
All of these comments demonstrate the wisdom of the action that we
are taking today to support small business growth. I urge my colleagues
to vote ``yes'' on this latest initiative to work with business owners
in the private
[[Page H4474]]
sector to strengthen our economy, to spur innovation, and to create
jobs.
Mr. CAMP. Mr. Speaker, I continue to reserve the balance of my time.
Mr. LEVIN. Mr. Speaker, I yield 2 minutes to the very distinguished
Member from New Jersey (Mr. Andrews).
(Mr. ANDREWS asked and was given permission to revise and extend his
remarks.)
Mr. ANDREWS. I thank the chairman for yielding.
Mr. Speaker, it is axiomatic in American politics and on this floor
that Members come to the floor and praise small business to the
heights. People frequently cite statistics which state that small
businesses create most of the new private-sector jobs. They're right.
They praise small business men and business women, and they are right
to praise them. Though, I think, after all the words, it is time that
we took some action that actually benefits small business people in the
country. This bill provides such action.
It provides access to credit for small businesses which desperately
need it. I think Americans are frustrated--and small business people
share in the frustration--that, after advancing hundreds of billions of
dollars to banks, many of those dollars haven't seemed to find their
way into loans to small businesses. The underlying bill begins to
address that problem in a very significant way. It extends a practice
that this chairman and his predecessor began of extending tax cuts to
small businesses. A small business that buys a laptop or a truck or
some other piece of equipment can expense that. Businesses can, in
effect, cut their taxes by investing their businesses in the economy.
Then we have the ironic statement by the minority leader that, in
order to help small businesses, he wants to repeal a law that helps
small businesses, for the first time, buy health care. What the new
health care law says is that a person running a small software company
or a restaurant or a delicatessen should be able to buy health
insurance with the same volume discount that Lockheed Martin or General
Electric gets. Small business people have been asking for that
opportunity for a very long time. The law the President signed provides
that.
It is very important to understand that, with all due respect, the
minority leader did not correctly state the impact of the bill on small
business, so let the record correctly reflect the state of the new law.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. LEVIN. I yield the gentleman an additional minute.
Mr. ANDREWS. If a small business person has 50 or fewer full-time
employees, there is no mandate on that business to do anything.
Businesses which choose to provide health insurance to their employees
will have the same abilities that huge companies have to buy health
insurance at a discount if they choose. Companies with fewer than 50
full-time employees don't have to do anything. Many of the small
businesses which do choose to insure their employees will get
significant tax cuts to help them do that.
After all of these words, isn't it time we had some loans for small
business? Isn't it time we had some tax cuts for small business and
some affordable health care for small business? If you want words, take
the minority's approach. If you want action, support this bill.
Mr. CAMP. Mr. Speaker, I continue to reserve the balance of my time.
The SPEAKER pro tempore. The Chair will note the gentleman from
Michigan has 10 minutes remaining, and the gentleman from Michigan has
6 minutes remaining.
Mr. LEVIN. I yield 2 minutes to the gentlewoman from Texas (Ms.
Jackson Lee).
{time} 1630
Ms. JACKSON LEE of Texas. I thank the gentleman for his leadership,
and I thank the full Committee on Ways and Means for being a lifeline
for small businesses. And I ask my colleagues on the floor of the House
to join them.
Without this effort, small business doors across America will close.
And, frankly, I believe it is important. As my colleague just said, let
us walk the walk and talk the talk. For it is now time to invest in
small businesses, which, in actuality, create the backbone of the
economy of America and provide for employment in our rural and urban
areas across this Nation. In fact, I think it is important to note this
bill is paid for. By closing the black liquor loophole and the gift
loophole, it will create $8 billion to ensure that we can do the right
thing for our small businesses.
I come from an area that is now being impacted by a major oil spill.
I visit businesses whose doors are closing for lack of assistance. And
I'm glad that we have a President who realizes who is important and is
ready to sign this bill.
Small businesses are in need. And so what we have here is an
opportunity for banks to refocus their lending policies and give
startup credit and access to dollars to help build these small
businesses.
Many of us heard of the redirection of the moneys that we lent to big
banks in order to help them help America. Well, unfortunately, they
couldn't find the doors of small businesses, many of my constituents.
And so I am eager to have this legislation passed that's paid for to
provide startup costs for small businesses that always have had a major
impediment in getting in the door of these banks. Therefore, any relief
for small startups is a plus by increasing the amount allowed to be
deducted from the bottom line. And the capital gains issues as well
that will be very important.
I believe, finally, we need to hold these banks accountable by asking
them to provide a plan to ensure that they are providing lending to
these businesses. I ask for support of this legislation.
I rise in support of the Small Business Jobs Tax Relief Act of 2010,
H.R. 5486. I also want to thank Chairman Sandy Levin and the members of
the Committee on Ways and Means for their hard work on this
legislation. The bill amends the Internal Revenue Code of 1986 to
provide tax incentives for small business job creation, and for other
purposes.
This bill provides targeted relief for the Nation's small businesses.
Without this relief, many small businesses will close, adding to the
U.S. unemployment rate, still historically high at 9.7 percent. The tax
relief in this bill will begin to address a number of issues
confronting the owners of small businesses:
(1) Start-up costs for small businesses have always been a major
impediment to their success. Therefore, any relief for small businesses
start-ups is a plus. By increasing the amount allowed to be deducted
from the bottom line, a small business can then use the additional
resources to grow and to expand his or her business. The bill would
increase the deductible amount for start-up costs from the current
$5000.00 to $20,000.00 for 2010 and 2011.
(2) The bill also eases restrictions on real estate holdings where
qualified Small Business Investment Company (SBIC) loans are involved.
(3) This bill will increase, from 50 percent to 100 percent, the
exclusion from gross income of the gain from the sale or exchange of
qualified small business stock acquired after March 15, 2010, and
before January 1, 2012. By reducing the tax liability related to gains
on the sale of small business stock, this will free resources to be
used for other business purposes in this tight economy.
(4) Another important provision in the bill will exclude from gross
income any amount paid under the small business borrower assistance
program. Again, tax relief in any shape or form for small businesses is
critical to sustained economic growth and economic recovery.
In addition to these tax reliefs, the bill also requires the
Commissioner of the Internal Revenue to provide annual reports to
Congress on penalties relating to tax shelters and other transactions.
Any additional measure designed to promote transparency and
accountability must be supported. Again, this bill is a timely measure
that will grant relief to a major segment of the Nation's business
sector, suffering from the lasting effects of the worst recession in
our history. I urge my colleagues to support H.R. 5486.
Mr. CAMP. I yield myself such time as I may consume, Mr. Speaker.
I agree with much of what some of the speakers have said today about
the importance of small business and the job creation that small
business has been responsible for. You can see statistics where 80
percent of the job creation in recent years has been because of small
business. Certainly, if we're going to recover as an economy, small
business will lead the way, and needs to recover. And we've seen over
the past few years the way small business has been organized.
Increasingly,
[[Page H4475]]
they're pass-through entities. The vast majority of small businesses
are pass-through entities.
So what does the majority do? They pass a small business bill that
doesn't apply to the majority of small businesses. This provision here,
which is the bulk of the bill that excludes capital gains on the sale
of certain small business stocks, only applies to qualified small
businesses. Well, what is a qualified small business? A C corporation.
That's how most large businesses are organized. So this bill won't do
anything.
Again, while we have record debt, the largest in the history of this
country, well over $13 trillion and an estimate from the Treasury
Department that, in 2015, the debt will exceed the size of the entire
economy of the United States for the first time in history--before we
spend taxpayer dollars, we ought to do it in a way that's effective.
There are things that we could do for small business. I will say the
majority has made this bill better than it was the first time by
dropping some of the controversial provisions that would have
potentially caused our trading partners to retaliate against us.
Obviously, closing the black liquor provision is something that I think
every Republican supports as well. That's a good thing. But the fact
that this legislation is not where it should be doesn't mean that we
should just look the other way and pass it, because it doesn't meet the
standard that this Congress should be meeting in this difficult
economic time.
I yield 1 minute to the gentleman from New Jersey (Mr. Garrett).
Mr. GARRETT of New Jersey. I thank the gentleman for yielding.
I know that our leader was just down here speaking a moment ago with
regard to what is going to be coming shortly, which is the MTR, and I
just want to take a moment in regard to that as well, a motion to
recommit that will reduce the uncertainty and reduce the regulatory
burdens facing who? The small businesses, by repealing the so-called
individual mandate from the recently passed health care bill.
Why do we talk about that now? Well, I have a bill that basically
does the exact same thing. I introduced H.R. 4999, the Reclaiming
Individual Liberty Act, which would also repeal that mandate. Because
as we come to the floor right now, it's granted the authority to
regulate various aspects of our economy is broad but is not that broad
to be able to impose an individual mandate on what we know is, by doing
so, we will hurt not only the individual and the family but also the
economy of this country as well.
So I commend the gentleman for his work in this regard. I commend the
gentleman for the MTR that we're about to see in a few moments. Because
in that MTR, just as in the Reclaiming Individual Liberty Act, we
recognize that the Constitution prohibits the expansion of government
authority in those areas. If we had that ability to do that here,
wouldn't we have already done that last year with regard to the auto
industry and said, we can mandate people to buy automobiles in that
area? We can't do it in that area. We can't do it in this area. And I
commend the gentleman for it.
Mr. CAMP. I thank the gentleman for those comments. He makes a very
important point.
In closing, I just want to say that we look at the costs that the
individual mandate particularly is going to hit hard on small
businesses and how difficult that's going to make it for them to
continue to be able to expand and hire workers. And we know that the
small business health care tax credit is virtually a fraud; that 90
percent of small businesses won't be able to qualify for that because,
again, that's so narrowly drafted that there's the rhetoric of being
able to say, Aren't we doing all these great things? But the reality is
there's nothing there.
Let me just say that at the end of 2010, when all the individual
income tax rates increase, as well as on dividends and capital gains,
that's going to hit small business particularly hard because most small
businesses file as individuals. And that's going to make it much more
difficult for them to expand. It's going to make it much more difficult
for them to hire and much more difficult for job creation to occur.
Also, I would say that another difficult problem is that this bill,
while it generates $7 billion in tax revenue, it only provides about
$3.5 billion in tax relief. So, again, taxes are being raised
permanently for temporary spending in other parts of our economy, and
it's my understanding that most of that extra revenue will be used to
help pay for another TARP-like program--TARP III as some call it--
that's going to be coming our way.
So, again, with our unemployment rate continuing to be at a lingering
10 percent, the difficulty our small business, the engines of economic
growth and job creation are facing, the help they need, this bill is
not enough. Again, it takes us down a road of higher spending that our
Nation cannot afford at this time.
With that, I yield back the balance of my time.
Mr. LEVIN. I think anybody who has listened to this debate, if
they're at all objective, will be completely puzzled by the arguments
of the minority. They say this bill won't do anything. But then they
say there are tax increases to pay for it that are permanent. That's
worse than a lame argument. It's completely without merit and is
vacuous. The bill is scored for small business in terms of the
exclusion from capital gains tax over 10 years at almost $2 billion.
That's nothing. It provides relief from penalties. Over $175 million to
small business. That's nothing. It provides an increased deduction for
startup expenditures that provides over half a billion dollars, as
scored. That's nothing.
Now what's nothing are your arguments. And so you come here, I think,
afraid to vote ``yes'' because it will blur your political message. You
say you agree with these provisions, but then you're going to vote
``no.'' You just don't apparently want to be caught being bipartisan.
It's going to blur a political message.
I don't understand your argument that the tax provisions are
permanent. You don't argue these aren't loopholes. They're loopholes.
And you criticize us for closing a loophole permanently, and then you
say it's for spending, but you don't really challenge the validity of
the spending. We do pay for some moneys for the second bill that's
coming up because it provides loans to small businesses, and it also
provides States that have written us supporting this bill, including
your State, Mr. Camp, saying that they will use this money well to help
collateral support for small businesses.
So it's worse than puzzling. I think it's a pathetic effort to find
an excuse to vote ``no.'' So then you come up with the argument you
have a motion to recommit.
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore. Members are reminded to direct their
comments to the Chair and not to other Members.
Mr. LEVIN. I'll be glad to do that, Mr. Speaker.
So then there's a motion to recommit to repeal an individual mandate.
All I can say is that the individual mandate was the basis of the
Republican health care proposal in 1993 and 1994. And now you come up
and say you want to eliminate it. This is another entangled position of
yours. You're tying yourselves into knots trying to oppose a bill that
will provide help for small business. Maybe it's useless to appeal for
bipartisanship to the other side.
I close asking for support.
Mr. Speaker, in conjunction with today's consideration in the U.S.
House of Representatives of H.R. 5486, the ``Small Business Jobs Tax
Relief Act of 2010,'' I have asked the nonpartisan Joint Committee on
Taxation to make available to the public a technical explanation of the
provisions included H.R. 5486. This technical explanation reflects the
Ways and Means Committee's understanding and legislative intent behind
those provisions. It is available on the Joint Committee on Taxation
website at www.jct.gov and is listed under document number JCX-31-10.
Mr. DAVIS of Illinois. Mr. Speaker, as we rebound from the greatest
recession that has ever plagued this nation, it is important that we
continue to support legislation that creates jobs and refurbishes the
economic stability of American families--supporting small businesses,
taxpayers and building a solid foundation for economic recovery.
Small businesses are the life blood of American communities, creating
two-thirds of the new jobs over the last 15 years. However, these
entrepreneurs are stifled in their efforts
[[Page H4476]]
to boost the American economy in that they are frequently denied loans
and face tight lending standards. Some of the most impoverished
citizens in this nation live in the 7th Congressional District of IL.
While the national unemployment rate in October 2009 rose to 9.8
percent, these communities experienced unemployment rates of up to 40
percent. We must do all that we can to provide jobs for American
citizens and boost the economic stability of this nation. For this
reason, I strongly support H.R. 5486--spurring investment in small
business, providing for small business penalty relief, and increasing
the deduction for business start-up expenses.
These provisions are critical. They provide performance-based
incentives to make sure that banks lend to small businesses and avoid
what happened in 2009 when 45 percent of small businesses seeking loans
were denied credit. Most importantly, as the nation continues its
effort to create jobs and overcome high rates of unemployment, these
provisions increase the deduction for start-up expenditures and allow
entrepreneurs to focus on hiring workers and strengthening the economic
stability of their businesses.
Mr. ETHERIDGE. Mr. Speaker, I rise in support of H.R. 5486, Small
Business Jobs Tax Relief Act. Small businesses form the backbone of our
economy, and this bill helps them grow and create jobs.
H.R. 5486 incentivizes people to invest in small business by
increasing the capital gains tax cut. In addition, this bill would make
it easier for entrepreneurs looking to start their own small business.
H.R. 5486 would quadruple the tax deduction for your start-up and allow
more businesses to qualify for the maximum deduction. These
entrepreneurs can recover more startup expenses, and then work towards
growing, expanding, and hiring new workers.
I have always been a supporter of budget discipline, and the
investments we make in this bill are fully paid for. These small
business tax measures are paid for by tightening rules for claiming the
biofuels tax credit and the estate and gift tax rules. I am pleased
that we are able to help grow our economy and reduce the national
budget deficit.
While there is solid evidence that the economy is beginning to
rebound, the recovery is on shaky footing. Across North Carolina,
unemployment is still in the double digits and some counties in the
Second District still have unemployment rates of up to 13 percent.
Helping private industry create jobs needs to be our top priority, and
small businesses are responsible for as many as two out of every three
jobs created in our country. This bill provides tax relief to help
small businesses create the jobs that we desperately need, and helps
them help Main Street America.
As a Member of the House Committee on Ways and Means, I support tax
cuts that help small businesses contribute to our economic recovery.
This should be a bipartisan effort, and I urge my colleagues to join me
in voting for its passage.
Mr. VAN HOLLEN. Mr. Speaker, for every American seeking a job, and
every small business trying to expand so they can hire them, I rise in
strong support of the Small Business Jobs and Credit Act of 2010 and
the Small Business Jobs Tax Relief Act of 2010. These two pro-growth
initiatives illustrate very clearly that jobs continue to be job one in
the 111th Congress.
Small businesses are the engines of our economy, and timely,
affordable credit is very often the fuel that helps them grow. Since 45
percent of small businesses currently report inadequate credit to
support their needs, the Small Business Jobs and Credit Act establishes
a new $30 billion fund for community banks, which will leverage up to
$300 billion in new private sector lending to small businesses.
Importantly, this new lending facility includes performance-based
incentives to encourage near term lending by reducing borrowing costs
to participating banks that increase their lending over 2009 levels and
increasing borrowing costs when lending activity is reduced. The result
will be a timely infusion of fresh credit to cash-strapped small
businesses looking to create jobs in our growing economy.
To make it easier for entrepreneurs to attract capital and launch new
companies, today's legislation also provides a zero capital gains rate
on equity investments in qualifying small businesses made between March
15, 2010 and the end of the year--and it quadruples from $5,000 to
$20,000 the deduction small businesses can take for start-up
expenditures in their first year of operation.
Mr. Speaker, this legislation is broadly supported by the National
Small Business Association, the Small Business Majority, the Conference
of State Bank Supervisors, the Independent Community Bankers of
America, the American Bankers Association and the National Bankers
Association. It is fully paid for and deserves my colleagues' support.
Mr. BLUMENAUER. Mr. Speaker, I rise today in support of H.R. 5486,
the Small Business Jobs Tax Relief Act and H.R. 5297, the Small
Business Lending Fund Act of 2010. These bills will help small
businesses grow, create wealth in our communities, and create new jobs.
As we often hear, small businesses drive our economy and create the
most jobs.
I have heard from businesses across my district that have had trouble
accessing capital to expand their businesses, to weather this economic
storm that Oregon faces, and to add to their workforces. Thousands of
jobs have been lost, millions of dollars of savings have evaporated,
and dreams have been cast aside or deferred for far too many Oregon
families.
The legislation that we will pass today will ease these challenges.
The legislation establishes a $30 billion fund to boost lending to
small businesses by community banks. To ensure that the additional
funding is deployed, the recipient community banks will owe the US
Treasury a variable dividend. The more they lend to small businesses,
the less they will owe to the Treasury. If they fail to lend, then the
dividend obligation increases.
The legislation also makes important tax changes that will benefit
the small business community.
The legislation reduces capital gains taxes on the small business
community. Under the Recovery Act, Congress excluded seventy-five
percent of capital gains tax on the sale of small business stock during
2009 and 2010. This legislation continues and expands that policy by
increasing the exclusion to one hundred percent for 2010 to 2012.
The legislation also improves the ability of small businesses to
deduct start up costs. Under current law, a start up may deduct $5,000
of start up costs; this legislation will expand that deduction to
$20,000. These costs include market surveys, initial advertisements,
training costs and other costs associated with starting up a business.
Oregon is still struggling with a near record unemployment rate of
10.6 percent, a percentage point above the national average. In April
2010, over two hundred thousand Oregonians remained unemployed. It is
imperative that we do all that we can to improve the economy and to put
Oregonians back to work.
Mr. LEVIN. I yield back the balance of my time.
The SPEAKER pro tempore. Pursuant to House Resolution 1436, the
previous question is ordered on the bill.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. Pursuant to clause 1(c) of rule XIX, further
consideration of H.R. 5486 is postponed.
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