Small Business Jobs And Tax Relief Act--Motion To Proceed
Madam President, first, before I make my comments--I want to talk about the Small Business Jobs and Tax Relief Act--I want to say to my friend from West Virginia, I know they are struggling under incredible issues--even before the storm…
Madam President, first, before I make my comments--I want to talk about the Small Business Jobs and Tax Relief Act--I want to say to my friend from West Virginia, I know they are struggling under incredible issues--even before the storm that occurred. I know he has efforts he is doing to build infrastructure, and his statements are right on the mark.
In western Alaska, 40 percent of the communities do not even have water infrastructure. It is not a question of rebuilding it; they do not have it. So I recognize the Senator and his great work for West Virginia, making it a better place. His points are well thought out and right to the mark about what we need to do to rebuild this country. A good part of all that is it is about American jobs, American workers building those water and sewer lines and putting those transmission lines back up--whether they be above or below the ground.
So, again, I commend the Senator for his work in West Virginia.
Madam President, I have come down to talk about the Small Business Jobs and Tax Relief Act. I come from the small business world. I know people come down to the Senate floor on the other side of the aisle and talk about being from the small business world. I always like to look and see what that really means. It is always amazing to me.
When someone is from the small business world, here is what it is really about: It is not about working for some corporation, having a nice title, not really worrying about making it from day to day or worrying about a payroll. At the end of the day, if the business is not good, they do not get a check. That is how it works in the small business world.
So when I hear people come down and talk about small business, it surprises me, to be very frank, the lack of understanding, the lack of knowledge they have about the small business world. I have been in it from the age of 14. My wife has grown a business from serving and selling smoked salmon on the street corner to now, having a couple retail stores and doing very well. But she has struggled just like everyone else. She has had to deal with the bureaucracy. She has had to figure out how to raise the capital, put retirement money on the table, maximize her credit cards--do everything possible to take her dream and make it a reality, just as I have done for all my years in the small business world.
So I come here not just as a Senator from Alaska, representing Alaskans and small businesses, but also as someone who has lived it, worked it, and understands it. We have a chance--and I appreciate the 80-to-14 vote to let us proceed to this bill, which is the Small Business Jobs and Tax Relief Act. This is an important bill. It has two components that seem simple in a lot of ways but have great impact.
First, I want to mention the idea that you can get a tax credit for hiring people. Some say, well, small businesses will not use a tax rate just to hire people. I, maybe, agree to a certain extent on that, but why is this important? If you are a small businessperson and you are going to increase your payroll--maybe you are giving raises or bonuses, and so forth, or you are going to hire part-time or full-time people, if you hire those people--and just a clear example is if your payroll is $200,000, and your payroll goes up by $20,000 to $220,000, you will get a tax break of 10 percent, which is $2,000.
What will that small business do with that $2,000? In a big business that just gets lost in some pile. Maybe it goes to some corporate salary. But here is what a small businessperson will do with it. They will get that $2,000, and they might now go recarpet their lease-hold improvement or their rental space they are using for their small business.
What does that mean? That $2,000 now goes to the carpet layer and the carpet seller. What will they do with it? They will put it into the next part of the economy. It just keeps moving much quicker and faster in the economy. As a matter of fact, every $1 we see out there has a multiplier effect that is pretty significant for small business.
So the one piece is giving tax credits for small businesses to increase their payrolls. It may be for increased salaries or for increased employment. Either way you are putting more money into the working people of this economy and, therefore, they are putting it back into the economy.
The second piece of the act is the depreciation. If you are not a small businessperson, you do not really pay a lot of attention to this. But the way the IRS Code works is if you invest in new equipment, carpeting, sheet rock, lighting, whatever, the IRS has these schedules to deappreciate this over many years.
Here is how it works: First, we have the tax credit for payroll, and now we have a second piece of this bill, which is accelerated or bonus depreciation, which means if you are thinking of an idea--I will tell you, a small business I just visited in Alaska called Lime Solar, by Chet Dyson and Jessie Moe--these are two young men who are starting a small business to sell solar products for homes and businesses, but they got a lease-hold space. They rented a space. It had no sheet rock, no lighting. They are responsible for paying for all of that.
So they invested, they cleaned it up, sheet-rocked it, fixed it all up, put equipment in. All that expense now--if this bill passes--can be written off in the first year instead of depreciating it over multiple years.
Why is that important? Let's assume they spent $100,000 renovating their facility and they are in a 25-percent tax bracket. They will save in the first year $25,000--like that--instead of spreading that over the next 10 or 15 years. Why is that important? That $25,000 they save in taxes or depreciation they will be able to reinvest, reinvest into their business as they struggle to figure out how to build their markets.
Another friend of mine, Jack Lewis, opened his second restaurant recently, Firetap. Restaurants are not a cheap business. I have been in that business. I would not wish it on anybody. It is a tough business. Margins are thin. But, again, he invested, he built it, built it all out of scratch. Now he can, again, under this bonus depreciation schedule depreciate it, write it off in the first year. That is a huge benefit for these small businesses.
When I look at another small company called SteamDot Coffee--it is a small coffee company. Jonathan White owns it. They brew their own coffee, have their own coffee, and they also package it and manufacture it for resale. That takes a lot of equipment. Now they get to write that off in the first year.
What this bill does is simple, but yet it has a huge impact. As a matter of fact, under the depreciation it is estimated that for every $1 we give in the tax benefit, there is a $9 benefit to the GDP, a 1- to-9 ratio. Any businessperson would love that deal. That is a great deal.
So this bill, I hope--our colleagues have shown by 80 to 14 this is a great bipartisan effort. I hope we now move to the next stage. Maybe we will have some amendments and work through it. But lets do it for the small business community of this country, for the State I live in, and for every State.
I say to the Acting President pro tempore, the State of New York is piled with small businesses. When you go through New York City, every inch of the street has a small businessperson. That is what drives this economy. That is what makes this economy happen. That is where we need to put our investment.
I will end on this note: I know we will have some pro forma votes, as I call them, show-and-tell. We will vote on this 20-percent tax rate deduction that is being proposed by the House. It sounds good, but there is no guarantee that is going to go back into the economy. As a matter of fact, if you are a hedge funder, you will get that break. If you are an attorney, you will get that break. If you are a small businessperson, you will get that break. But there is no guarantee that money goes back into the economy. So if we are going to give these tax incentives, let's make sure it is helping the economy and building jobs and building a future for us.
So, Madam President, I just wanted to come down and speak on this bill and encourage my colleagues to support the Small Business Jobs and Tax
Relief Act, not only through the pro forma vote we had yesterday to move forward on it but also to really pass it.
We have done a great job the last few months passing a lot of legislation out of this body. Let's continue that effort and help our economy grow.
Madam President, I suggest the absence of a quorum.