[Congressional Record Volume 161, Number 184 (Thursday, December 17, 2015)]
[Senate]
[Pages S8750-S8752]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                PROTECTING AMERICANS FROM TAX HIKES ACT

  Ms. COLLINS. Mr. President, tomorrow the Senate will vote on the 
Protecting Americans from Tax Hikes Act of 2015, which will provide 
needed tax certainty and predictability for our Nation's small 
businesses, enabling them to create more jobs and boost our economy.
  Several months ago, on April 30, I was joined by my friend and 
colleague from Pennsylvania, Senator Casey, in introducing the Small 
Business Tax Certainty and Growth Act of 2015. Our bill aimed to help 
small businesses invest, grow, and create jobs by providing needed tax 
relief and certainty. Senator Casey has been a true partner in 
advancing this bill, and we are so pleased that the Protecting 
Americans from Tax Hikes Act takes three key provisions from our 
bipartisan bill. These provisions include, first, the permanent 
extension of section 179 expensing, indexed for inflation, which will 
allow small businesses to write off up to $500,000 of the cost of 
certain equipment. I would note that this provision is so important to 
our smaller businesses that it is the No. 1 tax priority of our 
Nation's largest small business advocacy group, the National Federation 
of Independent Business. Second, the bill includes the permanent 
extension of the 15-year deduction period for restaurants and retailers 
to improve their space and to buy new equipment. This is so important 
because otherwise the Tax Code reverts to a 39-year depreciation 
schedule. That is totally unrealistic. No restaurant could wait 39 
years before investing in new flooring, new equipment, and other kinds 
of renovations and expect that customers will still come flocking to 
their doors. The third provision of our bill would be an extension of 
so-called bonus depreciation to allow companies to deduct the cost of 
certain equipment and software.
  These three provisions will give our small businesses the 
predictability they require to plan for capital investments that are 
vital to expansion and job creation.
  I know I don't have to tell the Presiding Officer that small 
businesses create the majority of new jobs in this country. According 
to the Bureau of Labor Statistics, small businesses generated 63 
percent of net new jobs that were created between 1993 and 2013. Even 
the smallest firms had a notable effect on our economy. The Small 
Business Administration data indicate that businesses with fewer than 
20 employees accounted for 18 percent of all private sector jobs in 
2013.

[[Page S8751]]

  Recent studies by the National Federation of Independent Business 
indicate that taxes are the No. 1 concern of small business owners and 
that the constant change in our Tax Code is among their chief concerns. 
I know this to be true from the many conversations I have had with 
small business men and women throughout the State of Maine. It is so 
frustrating to them because they don't know what the Tax Code is going 
to provide from year to year, making it nearly impossible to plan. This 
has the effect of freezing their investment decisions, and that in turn 
affects their ability to hire more workers.
  The long-term solutions provided in this bill will provide the 
certainty small businesses need to create and implement long-term 
capital investment plans that are vital to growth and job creation. For 
example, section 179 of the Tax Code allows small businesses to deduct 
the cost of acquired assets more rapidly. The amount of the maximum 
allowable deduction, however, has changed three times in the past 8 
years and has often been addressed as a year-end ``extender,'' making 
this tax benefit unpredictable from year to year and therefore 
difficult for small businesses to take full advantage of in their long-
range planning.
  Let me give a concrete example. Earlier this year I spoke to Patrick 
Schrader from Arundel Machine, a precision machining business in 
Southern Maine. He told me that the uncertainty surrounding section 179 
has hindered his ability to make business decisions. The high-tech 
equipment he needs requires months of lead time. For a small business 
like Patrick's, it is very risky to increase spending to expand and 
create new jobs when the deductibility of those investments remains 
unknown until the very end of the year. For business planning, this is 
information that is vital to have at the beginning of the year, not at 
the end. This uncertainty has a direct impact on hiring decisions.
  I wish to give another example of what the small business expensing 
provisions can mean. Maine has become well known for its high-quality 
craft beers. Dan Kleban founded the Maine Beer Company with his brother 
in 2009. In 6 short years his business has added more than 20 good-
paying jobs with generous health and retirement benefits, and they want 
to add even more. Dan noted that his company's business decisions have 
been directly affected by the availability of section 179 expensing. 
This provision fueled their expansion by allowing them to reinvest 
their capital into new equipment to produce more great beer and hire 
more great Maine workers. In the last 3 years, they have taken the 
maximum deduction allowed under section 179 to acquire the equipment 
needed to expand their business. This year they hope to use the 
provision to finance the cost of a solar project that will offset 
nearly 50 percent of their energy consumption. If the business had been 
forced to spread these deductions over many years, its owners simply 
would not have been able to create the new jobs as they have.
  This economic benefit is multiplied when you consider the effect of 
the investment by Maine Beer Company and Maine's many other small 
brewers and other kinds of small businesses on equipment manufacturers, 
on the transportation companies needed to haul that new equipment, and, 
in the case of craft beers, on the suppliers, the supply chain, 
including farmers who are providing the materials needed to brew these 
outstanding beers.
  In February, NFIB released new research that backs up this claim with 
hard numbers. NFIB found that simply extending section 179 permanently 
at the 2014 level could increase employment by as many as 197,000 jobs 
during the 10-year window following implementation. U.S. real output 
could also increase by as much as $18.6 billion over the same period. I 
mention those numbers because it shows how beneficial this provision of 
our Tax Code can be when it is made permanent, when the uncertainty 
about whether it is going to be available and at what level goes away.
  In light of the positive effects these provisions would have on small 
businesses, on jobs, and on our economy, I urge my colleagues to 
support the tax relief package.
  I am pleased to yield to my cosponsor and colleague Senator Casey.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. CASEY. Mr. President, I commend and salute the work done by 
Senator Collins. I am grateful to have this opportunity to reiterate 
some of the great features of this legislation as it relates to these 
tax provisions. If I had to summarize it in a couple of words, it would 
probably be the following: certainty for small businesses--maybe just 
those four words.
  Senator Collins, when we talk about reaching across the aisle, I am 
one desk in from the aisle and you are almost on the aisle. It is 
almost literally reaching, you are so close. But I am so grateful for 
your work on this issue for several years now. And with all the 
difficulties in Washington where often folks don't come together on 
these and other issues, we can show that we can work together and we 
can make progress on something, giving certainty to small businesses. 
That is a pretty big deal. In our State we have something on the order 
of 2.5 million people working in small businesses, so this is the core 
of our country in the Commonwealth of Pennsylvania and across the 
country.
  I would reiterate and maybe even incorporate by reference Senator 
Collins' review of the provisions. I would highlight two of them. The 
15-year depreciation schedule for restaurants and other leaseholds and 
other businesses--if you have a restaurant and you can get the benefit 
of depreciation--figuratively speaking, a slice or a piece of 
depreciation year after year--it is a lot better if you can get the 
benefit of those slices or pieces over 15 years--one per year, or one 
benefit of depreciation--rather than having to wait 39 years for little 
tiny pieces over those 39 years. That is a simplistic way of explaining 
it, but it is a vital injection of support for small businesses.
  On section 179, I think what Senator Collins said makes a lot of 
sense because a lot of these businesses would see, well, in this 
particular year, the value of that maximum allowable deduction is at a 
certain number, a couple hundred thousand dollars. In the next couple 
of years it could change. Having that certainty of knowing what that 
benefit will be over time is of enormous significance. The same is true 
of the benefits that come from bonus depreciation.

  Mr. President, as I said, I rise today to discuss some critical tax 
provisions which Senator Collins and I worked to include in the end of 
year tax package soon to be considered by the House and the Senate.
  This is a day we fought long and hard for--a day to bring our small 
businesses and entrepreneurs the certainty they need to invest in their 
companies, grow and create the jobs our economy needs.
  As a member of the Senate Finance Committee, I understand that one of 
the best policy tools we have at our disposal to support small 
businesses is the tax code, which directly affects businesses' bottom 
lines.
  Business owners need certainty about tax policy. That is why I am 
proud to have worked with Senator Susan Collins to introduce bipartisan 
legislation that would allow small businesses to plan for capital 
investments that are vital for job creation, and am thrilled to see 
provisions from this commonsense proposal included in the end of year 
tax package. Their inclusion will increase certainty for businesses, 
increase economic activity and increase the pace of job creation.
  Small businesses are vital to our economy. In Pennsylvania small 
firms comprise more than 98 percent of all employers, nearly 2.5 
million Pennsylvanians work for small businesses. Across the country, 
small firms employ just over half of the private-sector workforce, 
according to the Small Business Administration.
  In the past, many of the tax provisions affecting small businesses 
have been enacted on an unpredictable and temporary basis; that changes 
with this bill. That uncertainty directly hindered economic growth and 
job creation. When businesses don't know how their investments will be 
taxed, they cannot make long-term planning decisions with confidence. 
This bill, with the policies I championed with Senator Collins, will 
change that.
  This end-of-year package includes several provisions which, through 
their

[[Page S8752]]

being made permanent, will immediately reduce uncertainty about the Tax 
Code and encourage businesses to grow, invest and hire.
  A key provision of our bill would make permanent the maximum 
allowable deduction under section 179 expensing rules. Section 179 
allows taxpayers to fully deduct certain capital asset purchases in the 
year they make the purchase. This type of expensing provides an 
important incentive for businesses to make capital investments. Without 
it, taxpayers would have to depreciate those asset purchases over 
multiple years. By making the maximum allowable deduction permanent and 
indexing it to inflation, our bill would provide the kind of certainty 
that businesses need to take full advantage of section 179.
  A second provision--bonus depreciation--will help businesses in much 
the same way that the expensing rules do. Bonus depreciation allows 
companies to expense half the cost of qualifying assets that they buy 
and put into service in the same year.
  The bonus depreciation provisions will provide 5 years of certainty 
to our businesses, creating an added incentive that makes a real 
difference in small business investment. A 2013 U.S. Treasury report 
concluded that 50-percent bonus depreciation lowers the cost of capital 
by 44.1 percent. These figures illustrate the tremendous benefit these 
policies can bring to our job creators.
  One additional measure, which I would like to touch on for a moment, 
is the provision to make 15-year straight-line depreciation schedule 
for restaurants, leaseholds, and retail improvements permanent.
  This February, Senator Cornyn and I introduced legislation to make 
the 15-year cost recovery provision permanent. I am glad to see its 
inclusion in the end of year tax package.
  These provisions together will encourage business owners to make key 
capital investments, and allow for faster cost recovery that goes 
directly to a company's bottom line, thus freeing up cash that can be 
used to expand operations and hire more workers.
  Making these measures either permanent or long-term creates the kind 
of tax certainty that is critical for all our businesses, but is 
especially important for small businesses.
  These are commonsense provisions that both parties can support. They 
will improve our business environment and ease the tax burden on small 
businesses. Most importantly, they will directly encourage the 
investment and job creation that our economy needs.
  I wish to commend and salute the work Senator Collins did. We are 
glad there is some certainty as a result of these business tax 
provisions.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.

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