An unlikely pair of senators is teaming up to push a range of targeted tax breaks to help small businesses get up and running.
Sens. Robert MenendezRobert MenendezThe right person for State Department is Rudy Giuliani Warren, Menendez question shakeup at Wells Fargo Democrats press Wells Fargo CEO for more answers on scandal MORE (D-N.J.) and Pat Toomey (R-Pa.), both Senate Finance Committee members, unveiled legislation Wednesday that would expand and make permanent several tax breaks aimed at helping small businesses get off the ground.
Toomey joked it was not “breaking news” that he and Menendez do not see eye to eye on every issue, but that helping small businesses receive tax relief and navigate the tax code was an area of common agreement.
The legislation would make several targeted changes to the tax code, mainly by making permanent temporary small-business tax breaks while expanding them.
For example, currently small businesses can only deduct the first $5,000 in start-up costs if the total cost of starting the business is under $50,000. The senators’ bill would allow up to $10,000 in costs to be deducted for any business that faces start-up costs under $60,000.
Other provisions would allow larger businesses to take advantage of simpler accounting methods, and allow some companies to deduct the cost of business losses before actually turning a profit.
The measure comes as leaders in both chambers are hard at work trying to come up with a complete overhaul of the tax code.
The senators said they would like to include their package in any comprehensive tax reform package crafted by their committee. But noting the uphill climb that the major legislative effort faces, they also said they would pushing to include the provisions in an end-of-year “extenders” package that Congress will likely take up to prolong expiring tax breaks.
Either way, unveiling the bill now allows them to shine a spotlight on these particular policy areas, which they argued would serve as an advantage to their interests in the upcoming debates.
The cost of the tax breaks has not yet been analyzed by the Joint Committee on Taxation, but Toomey said a ballpark estimate of its price tag is $80 billion. The legislation does not contain any offsets, as Toomey argued that the expanded economic growth driven by the bill’s provisions would make up for the lost revenue.