Obama seeks tax breaks for small business
The president wants to cut taxes on investment and add a 10% credit for businesses that create jobs or raise wages. Some of his proposals already have bipartisan support.
This post is by Jim Kuhnenn of The Associated Press.
Fleshing out a year-old initiative, the Obama administration wants Congress to enact or expand tax breaks for small businesses and remove barriers to startups, seizing on some existing bipartisan proposals that could win support even in the polarized climate of an election year.
At the state of a Cabinet meeting Tuesday, President Barack Obama called on Congress to pass legislation that, among other measures, would eliminate tax rates on capital gains for investments in small businesses and extend for a year the ability of all businesses to immediately deduct all of the costs of equipment and software purchases.
The legislative package, which will be part of Obama's 2013 budget proposal later this month, also would include a new 10% tax credit for small business that add jobs or increase wages in 2012. In addition, the legislation would make it easier for startup companies to raise money and to go public. It also would expand a government small business investment program from $3 billion to $4 billion.
"The president has made small businesses and particularly start-ups a key aspect of his economic growth agenda because he understands how much the newest and fastest-growing small businesses drive job growth in our economy," said Gene Sperling, director of the White House National Economic Council. (Post continues below video.)
The proposals borrow from past Obama initiatives and from bipartisan legislation that has either already passed in the House or is being proposed in the Senate. Obama's package includes proposals offered in the Senate by Democrat Chris Coons of Delaware and Republican Marco Rubio of Florida and another plan by Republican Jerry Moran of Kansas and Democrat Mark Warner of Virginia.
White House officials would not disclose the total cost of the president's package, but Sperling said it would be more than covered by proposals to reduce tax expenditures and by closed loopholes that the administration will call for in its 2013 budget.
With the presidential election set to become the main political preoccupation of 2012, the White House initiative is designed to take advantage of cooperative attempts by Republicans and Democrats to find modest remedies to spur the economy. Most of those efforts have been overshadowed by congressional bickering and by the Republican presidential primary and Obama's growing attention to his re-election.
The proposals come a year after the administration launched a consolidated effort to spur new start-up businesses with a high-profile White House event featuring scores of entrepreneurs, some of whom offered testimonials to the job creation possibilities that new businesses can bring to the economy.
Besides the tax breaks, a central element of the Obama package is to assist new entrepreneurs by making it easier for them to raise money, reduce taxes on their startup expenses, and removing securities barriers for new companies that have gone public.
"Our small business agenda has a specific focus on removing the barriers that have for too long blocked start-ups and entrepreneurs from getting the financing they need to accelerate their growth and hiring," Sperling said.
One of the Obama provisions would increase the amount of money that can be raised through small public offerings that don't require companies to undergo an extensive Securities and Exchange Commission registration process. The limit for such "mini public offerings" would increase from $5 million a year to $50 million.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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