Q: Are tax changes in store for small businesses by year's end?
A: The U.S. Senate in November adopted a plan that recognizes the job-creating engine of the U.S. economy. Generating up to 80 percent of new jobs each year, small businesses are key to the nation's economic growth. Small businesses employ half of all private sector employees in the United States. As chairman of the U .S. Senate Finance Committee, I support time-tested tax incentives that work to help create more good-paying jobs by our hometown employers. That's why I helped steer through the Senate a tax relief bill that would extend a significant tax tool for small businesses through 2009. Small business owners seeking to expand or improve their business would be able to deduct the purchase price for qualified pieces of equipment, such as cars, computers and machinery, up to $100,000 for an additional four years. This would give smaller employers more certainty and opportunities to expand and improve their bottom lines. In addition, Congress also may extend another popular tax-advantaged financing tool that's used for many projects in communities across Iowa. Industrial Revenue Bonds help localities to foster economic development in underdeveloped areas of town and give manufacturers the opportunity to expand their businesses, hire more workers and revitalize the local economy.
Q: What other reform measures being debated in Congress are important to small business?
A: The end of the tax year is an important planning period for businesses. Economic forecasts, tax liabilities, existing debt, payroll and pension commitments, cash flow and revenue projections factor into key financial and business management decisions for big and small businesses alike. Small business owners often operate on smaller margins and have a greater personal stake in end-of-the-year decisions. And taxes factor heavily into the mix. From my town hall meetings held in all 99 counties at least once every year, I am well aware of a burning issue for small business owners: tax simplification. From my leadership position on the tax-writing Finance Committee, I will lead the effort in the U.S. Senate as Congress considers proposals to simplify the federal tax code. Iowa's 240,000 small businesses can count on me to serve as a strong voice for their interests as I lead the way for tax relief and simplification in the U.S. Senate.