GOP dismisses White House proposal to extend tax break for small businesses
The White House on Monday announced that it will propose extending capital gains tax breaks for small business as part of its 2012 budget proposal due out in two weeks.
The announcement is part of an effort by the Obama administration to show it is focused on “winning the future” through job creation and investment even as congressional Republicans are focused on budget cutting. The winning the future theme was introduced in President Obama’s State of the Union address last week.
Republican leadership quickly dismissed the initiative as too small and called for larger tax incentives and protection from regulation for small businesses.
The White House will seek to permanently eliminate capital gains taxes on investments in small businesses, extending a temporary measure put in place in the 2009 stimulus bill and extended for a year in September via the Small Business Jobs Act.
It will also propose expanding the New Markets Tax Credit to “encourage private sector investment in startup and small businesses operating in lower-income communities,” according to a press release. The expansion will change the total investment exempted from taxation from $3.5 billion per year to $5 billion per year.
The White House made the announcement as it rolled out a new partnership with big business meant to spur investment in small startup firms.
Startup America, “an independent and private-sector campaign” will be led by Steve Case, co-founder of AOL and Carl Schramm, CEO of the Kauffman Foundation.
In conjunction with the announcement, the U.S. Chamber of Commerce announced a $1 million expansion of its entrepreneur education program.
The White House did not provide the cost of extending the tax breaks Monday.
Speaker John Boehner’s (R-Ohio) office said the White House needs to do more for the economy than picking new catch phrases.
“It seems the only thing new being offered by the White House this morning is another catch phrase. Not until the administration is prepared to break down Washington barriers to job creation — onerous mandates, costly regulations, and economic uncertainty resulting from massive budget deficits — will we see renewed confidence from American small business owners,” said Brendan Buck, a Boehner spokesman.
A Republican aide noted that the GOP has proposed a more extensive 20 percent tax deduction on small-business income, protections from costly new Washington regulations and the repeal of the “job-destroying” healthcare law, as ways to further help small businesses.
At the Monday event, Energy Secretary Steven Chu also announced a mentorship program for clean energy entrepreneurs, while Small Business Administration head Karen Mills announced two $1 billion investment funds. One if for clean energy firms or firms located in low-income communities, while the other targets early stage innovation businesses.
National Economic Council Director Gene Sperling said the administration is moving on entrepreneurship now because the period of economic recovery after a recession is a prime time for startups.
Economists say that today’s climate of relatively cheap credit and cheap labor helps small businesses.
Sperling noted that half of the nation’s Fortune 500 companies started during a recession or bear market.
Austan Goolsbee, chairman of the Council of Economic Advisers, said the initiatives build on other small business actions the administration has undertaken, including what he said were 17 tax cuts for small firms.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.